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Published: May 15, 2024
Updated: May 15, 2024

Vodafone Idea Set to Announce Q4 Results: Losses Expected to Widen, ARPU to Improve

Anticipation Builds Ahead of Q4 Results

Vodafone Idea Ltd is gearing up to unveil its March quarter results on May 16, following the conclusion of its Rs 18,000 crore follow-on public offer (FPO). Analysts are bracing for a widening of losses compared to the previous quarter. Despite a marginal improvement in average revenue per user (ARPU) quarter-on-quarter, expectations suggest a significant loss in subscriber base.

Revenue and Subscriber Projections

Nomura India projects Vodafone Idea's March quarter revenue to remain steady at Rs 10,700 crore. However, a 1% sequential increase in ARPU to Rs 147 per month is expected to be offset by a sharp decline of 42 lakh subscribers sequentially. The net subscriber base is estimated at 21.1 crore, with analysts predicting a decline in EBITDA and a further rise in net losses for the quarter.

Investor Interest and Mutual Fund Holdings

Leading mutual funds have shown increased interest in Vodafone Idea shares, with holdings rising to Rs 4,497 crore at the end of April. This marks a significant increase from Rs 1,292 crore at the end of March. However, the number of shares owned decreased substantially during the same period, as reported by ICICIdirect.

Analyst Insights and Expectations

Emkay Global foresees continued subscriber loss for Vodafone Idea, projecting a decline of 45 lakh subscribers in Q4. Despite expectations of adding 10 lakh 4G subscribers, ARPU is anticipated to rise by 1.1% quarter-on-quarter to Rs 147. Emkay Global expects a marginal decline in revenue and a flattish margin growth for the quarter.

Nuvama's Outlook

Nuvama anticipates a core loss of Rs 7,307 crore for Vodafone Idea in Q4, with revenue expected to rise by 2% year-on-year to Rs 10,779 crore. Moderate revenue growth of 1% quarter-on-quarter is forecasted, driven by a 2% increase in ARPU and a stable subscriber base. The company expects EBITDA margins to expand by 90 basis points quarter-on-quarter.

Key Considerations for Investors

As investors await the Q4 results, key areas of focus include updates on fund raising plans, strategies to increase network capacity, and efforts to arrest the decline in subscriber base. These factors will likely influence market sentiment and investor confidence in Vodafone Idea's future trajectory.Vodafone Idea's upcoming Q4 results are highly anticipated, with analysts closely monitoring financial performance indicators amidst challenging market conditions. Despite projected losses and subscriber decline, efforts to improve ARPU and expand margins offer potential avenues for recovery. Investors will closely analyze the announced results for insights into the company's strategic direction and prospects for growth.