In Short:
Vodafone Idea is expected to report flat revenue between ₹10,600 and ₹10,709 crore for the quarter ending June 30, due to subscriber losses and steady Average Revenue Per User (ARPU) at ₹148. Estimated net losses range from ₹7,489 to ₹8,100 crore. Different brokerages provide varying predictions, with results set to be announced on August 12.
Vodafone Idea is anticipated to report stable revenues for the quarter ending June 30, primarily due to a decline in its subscriber base and stagnant Average Revenue Per User (ARPU). Estimates from four brokerage firms suggest that the revenue for this reporting quarter will likely fall between Rs 10,600 crore and Rs 10,709 crore. Additionally, the projected net losses for the company could range from Rs 7,489 crore to Rs 8,100 crore.
The estimates have been provided by Nomura, Kotak Institutional Equities, JM Financial, and Nuvama Institutional Equities. Among these, JM Financial has the highest revenue estimate, while Nomura presents the lowest. In terms of net losses, Nomura forecasts the most significant decline on a year-on-year basis, whereas Kotak predicts a reduction in losses year-on-year.
The company will disclose its quarterly earnings on Monday, August 12.
Brokerage Recommendations
Nomura predicts net losses of Rs 8,100 crore for the current quarter, with revenues expected to remain unchanged both year-on-year and quarter-on-quarter at Rs 10,600 crore. The Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) is forecasted at Rs 4,400 crore, reflecting a potential increase of 5% year-on-year and 1% quarter-on-quarter. The EBITDA margin is estimated at 41%, compared to 39% in Q1FY24 and 40.9% in Q4FY24. Furthermore, the ARPU for this quarter is projected to rise to Rs 148, up from Rs 139 in Q1FY24 and Rs 146 in Q4FY24.
Kotak Equities expects Vodafone Idea’s net losses to decrease to Rs 7,489 crore for the quarter ended June, marking a reduction of 4.4% year-on-year and 2.4% quarter-on-quarter from Rs 7,840 crore in Q1FY24 and Rs 7,677 crore in Q4FY24. The anticipated net sales are projected to be Rs 10,618 crore, representing a modest decline of 0.3% year-on-year, while showing minimal change (0.1%) quarter-on-quarter.
The EBITDA for the quarter is expected to be Rs 4,225 crore, indicating a slight year-on-year increase of 1.6%, but a decrease of 2.6% quarter-on-quarter. Additionally, the Earnings Before Interest and Taxes (EBIT) loss is expected to be Rs 1,493 crore, with an EBITDA margin projected at 39.8%, reflecting a year-on-year increase of 77 basis points.
Kotak commented, “We expect flat revenue quarter-on-quarter as ongoing subscriber decline is likely to offset any marginal ARPU increases. Reported EBITDA is expected to decline by 3% quarter-on-quarter due to a rise in network operational expenses.” The brokerage anticipates a decline in the end-of-period subscriber base by 3 million, forecasting it to reach 209.6 million, while ARPU is projected to rise by 1% quarter-on-quarter to Rs 148/month.
JM Financial forecasts net losses of Rs 7,785 crore for the company, while reporting a slight revenue increase to Rs 10,709 crore, reflecting a growth of 0.5% year-on-year and 1% quarter-on-quarter. The EBITDA is expected to be Rs 4,339 crore, with an anticipated increase of 4.4% year-on-year and 0.1% quarter-on-quarter.
JM noted, “We predict a loss of 2.1 million subscribers for the quarter, which is an improvement over the 2.6 million subscriber loss in the preceding quarter. However, the growth in mobile broadband subscribers is expected to remain muted.”
Nuvama projects a revenue decline of 0.7% quarter-on-quarter for Vodafone Idea, linked to stagnant ARPU levels and continued subscriber losses, with EBITDA margins likely contracting by 70 basis points quarter-on-quarter.
(Disclaimer: The recommendations, perspectives, and opinions expressed by the experts are their own and do not represent the views of the Economic Times.)
