Synopsis: Vodafone Idea’s shares are in focus as Emkay Global maintains a SELL rating on the stock, with a target price of ₹6, implying a downside potential of upto 50%.
The shares of the Large-Cap stock specialising in providing integrated telecom services in India, including 2G, 3G, 4G, and 5G mobile voice & data, broadband, digital solutions, and enterprise services, have been in the spotlight following Emkay Global Financial Services’ report indicating a downside potential of up to 50 percent.
With a market capitalization of Rs. 1,23,836.09 crores on Monday, the shares of Vodafone Idea Ltd declined upto 3.6 percent, reaching a low of Rs. 11.36 per share compared to its previous closing price of Rs. 11.79 per share.
What Happened
Vodafone Idea Ltd, engaged in providing integrated telecom services in India, including 2G, 3G, 4G, and 5G mobile voice & data, broadband, digital solutions, and enterprise services, is in focus following the sell target of Rs. 6 by a leading brokerage firm, Emkay Global Financial Services, initiated a downside of upto 50 percent Potential from the day’s close.
No AGR waiver
The Union Cabinet, chaired by the Prime Minister, approved a relief package for the company, freezing its adjusted AGR dues of Rs. 877 billion (87,700 crore) to be paid in instalments during FY32–FY41. The company will also settle its outstanding AGR liabilities for FY18 and FY19 over the next five years.
Previously, it was scheduled to pay Rs. 759 billion (75,900 crore) in six annual instalments starting FY26. Additionally, the DoT raised a addtional AGR demand of Rs. 94.5 billion (9,450 crore) for FY16–17 and will form a committee to recalculate dues, including possible interest and penalty reversals, leaving room for further reduction in the company’s AGR liability.
Low Earnings Compared to Debt
Vi’s financial position remains under pressure despite multiple relief measures. Its pre-IndAS116 annualized EBITDA stands at Rs. 8.98 billion, just 6.7 percent of its spectrum debt, with a cash balance of Rs. 30.8 billion at end-Q2 FY26.
High Spending Keeps Debt Pressure
The management has guided for capex of Rs. 75–80 billion in FY26, keeping leverage high even without AGR dues. This highlights the need for the government to consider measures to reduce spectrum debt, while further capital infusion and restructuring of spectrum liabilities are critical for the company’s long-term sustainability.
Expensive valuation
Despite government relief measures, Vi’s debt levels remain high. While the government is taking steps to keep the company solvent, more significant reforms are needed to make Vi financially strong and its leverage manageable.
At a valuation of 13.6x FY27E EV/EBITDA, the stock appears expensive. Considering the high debt, rich valuations, and uncertainty around the government’s approach to spectrum debt, it maintains a SELL rating. It maintains an unchanged target price of Rs. 6 is based on 12x Q2FY28E EBITDA.
Financials & Others
The company’s revenue rose by 2.40 percent from Rs. 10,932 crore in September 2024 to Rs. 11,195 crore in September 2025. Meanwhile, the Net loss declined from Rs. 7,176 crore to Rs. 5,524 crore during the same period.
Vodafone Idea Limited is a partnership between the Aditya Birla Group and the Vodafone Group, and is one of India’s leading telecom service providers. The company offers pan-India voice and data services across 2G, 3G, and 4G/5G platforms.
With a large spectrum portfolio supporting the growing demand for data and voice, Vodafone Idea is committed to delivering exceptional customer experiences and contributing to the vision of a truly Digital India by enabling millions of citizens to connect and build a better future.
The company is also developing infrastructure to introduce newer and smarter technologies, empowering both retail and enterprise customers to be future-ready through innovative offerings that are easily accessible via a robust digital ecosystem and extensive on-ground presence.
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