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Vodafone Q4 results review – Subscriber loss slows down

Vodafone Idea Ltd. reported 2% QoQ Ebitda growth (pre-Ind AS-116) in Q4 FY24, despite a decline in revenue. Ebitda growth was supported by cost savings in network opex and subscriber acquisition costs, partly offset by high roaming/access costs. The subscriber loss slowed down in Q4.

The capital raise has provided some breather to Vodafone Idea as the long-pending capex and continuous subscriber churn have been affecting its operating performance. With the fund raise, the capex will be directed toward the rollout of 4G and 5G.

We have incorporated a tariff hike in our estimates, building ARPU growth of 16% and revenue/Ebitda compound annual growth rate of 18/27% over FY24-26E. Assuming 14 times enterprise value/Ebitda, coupled with net debt of Rs 2.1 trillion, leaves limited opportunities for equity shareholders.

For report,

Motilal Oswal

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