Vodafone Idea dips 5% as loss widens in Q3; stock down 33% from 52-wk high

While government relief (option of conversion of dues into equity) ensures the survival, the company needs to raise capital as early as possible to stay competitive, ICICI Securities said.

Shares of Vodafone Idea dipped 5 per cent to Rs 11.03 on the BSE in Monday's intra-day trade after the company's losses widened 59.5 per cent to Rs 7,230 crore in Q3FY22 on a year-on-year (YoY) basis amid fall in revenue and subscribers. In the same period last year, the company had posted a loss of Rs 4,532 crore.

With today's decline, the stock of the telecom services provider has corrected 33 per cent from its 52-week high of Rs 16.79 touched on December 10, 2021. At 09:34 am, the stock was down 4 per cent at Rs 11.40 on the BSE. In comparison, the S&P BSE Sensex was down 1.04 per cent at 58,424.

In Q3FY22, Vodafone Idea's gross revenue decreased 10.8 per cent to Rs 9,717 crore while earning before interest tax and depreciation and amortisation (EBITDA) slipped by the same margin to Rs 3,816 crore. The company's third quarter results last year had benefited from the exceptional income of Rs 1,686 crore, which included gains from stake sale in Indus.

On a sequential basis, however, the company fared better, registering 3.3 per cent increase in revenue. The increase was largely due to tariff hikes taken by mobile service providers in November. The average revenue per user (ARPU) for the quarter rose 5.2 per cent to Rs 115 on a sequential basis. The company, however, lost 5.8 million customers during this period.

While government relief (option of conversion of dues into equity) ensures the survival, the company needs to raise capital as early as possible to stay competitive. Subscriber churn also needs to be controlled, ICICI Securities said in a note.