Vodafone Idea tanks after foreign broker downgrades price by 83%

Vodafone Idea slumped 11.66% to Rs 13.43 after the foreign broker forecasted a potential downside of over 80% for the teleco stock.

The foreign broker has maintained a Sell rating on Vodafone Idea, revising its target price marginally upward to Rs 2.50 per share from Rs 2.20 previously.

Despite the slight increase in the target, the new forecast still represents a substantial declined from Thursdays closing price.

The foreign broker anticipates free cash flow will remain negative at least until in FY31. The broker projects an additional 300 basis points decline in market share over the next 3-4 years.

Additionally, the foreign broker said that to achieve sustainable free cash flow neutrality, average revenue per user (ARPU) would need to increase by Rs 200-270, compared to December 2024 levels.

Vodafone Idea is an Aditya Birla Group and Vodafone Group partnership. It is amongst India's leading telecom service provider. The company provides pan India voice and data services across 2G, 3G and 4G platforms. The company holds large spectrum portfolio including mid band 5G spectrum in 17 circles and mmWave 5G spectrum in 16 circles.

The telecom service providers consolidated net loss narrowed to Rs 6,432.1 crore in Q1 FY25 as compared with Rs 7,840 crore reported in Q1 FY24. Revenue from operations decline marginally to Rs 10,508.3 crore in Q1 FY25 as against Rs 10,655.5 crore recorded in the corresponding quarter previous year.

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