Goldman Sachs has a ‘sell’ rating on the shares of Vi with a target price at Rs 2.5. Vi is continuously losing subscribers and its share in the market has also declined 40 basis points sequentially. With that the EBITDA generation for the quarter was also below estimates, the company needed an EBIDTA generation matching the estimates to close the network gap to the competition that is Airtel and Jio, said the brokerage firm in a note.
Goldman Sachs is of the view that the market share erosion for Vi is going to continue for the year. It further added that the company requires a substantial amount of capital raise, and/or a tariff increase (ARPUs will have to rise by c.2.5x for co to be FCF neutral by FY27E) to get its stand in the market share.
Motilal Oswal has a neutral rating with a target price at Rs 9.
According to Motilal Oswal, Vi’s EBITDA for the quarter was flat as subscription addiction loss continued. The 5G spectrum also added to the debt worry.
Centrum India’s Nilesh Jain sees a further downside in this stock citing a weak chart structure in the stock. He expects prices to fall between Rs 8 and Rs 7.50. He suggested a Sell on rise strategy in Vi shares.
ICICI Securities said Vi’s enterprise business grew faster at over 15% on-quarter to ₹1,300 crore, which was partly driven by higher revenues from international long distance (ILD) services. Vi has bought enough 5G spectrum and requires capital only for rolling out the network, but aggressive deployment is dependent on the company’s ability to raise more capital, especially as peers are gearing up for faster 5G deployments.