Sell Vodafone Idea; target of Rs 6: ICICI Direct

ICICI Direct is bearish on Vodafone Idea has recommended sell rating on the stock with a target price of Rs 6 in its research report dated February 16, 2021.

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var titStr=”;var editw=”; var typevar=”; var pparr= new Array(‘Monitoring your investments regularly is important.’,’Add your transaction details to monitor your stock`s performance.’,’You can also track your Transaction History and Capital Gains.’); var phead =’Why add to Portfolio?’; if(secglbVar ==1) { var stkdtxt=’this stock’; var fltxt=’ it ‘; typevar =’Stock ‘; if(lastRsrs.length>1){ stkdtxt=’these stocks’; typevar =’Stocks ‘;fltxt=’ them ‘; } } //var popretStr =lvPOPRHS(phead,pparr); //$ (‘#poprhsAdd’).html(popretStr); //$ (‘.btmbgnwr’).show(); var tickTxt =’‘; if(typparam1==1) { var modalContent = ‘Watchlist has been updated successfully.’; var modalStatus = ‘success’; //if error, use ‘error’ $ (‘.mc-modal-content’).text(modalContent); $ (‘.mc-modal-wrap’).css(‘display’,’flex’); $ (‘.mc-modal’).addClass(modalStatus); //var existsFlag=$ .inArray(‘added’,newappndStr[1]); //$ (‘#toptitleTXT’).html(tickTxt+typevar+’ to your watchlist’); //if(existsFlag == -1) //{ // if(lastRsrs.length > 1) // $ (‘#toptitleTXT’).html(tickTxt+typevar+’already exist in your watchlist’); // else // $ (‘#toptitleTXT’).html(tickTxt+typevar+’already exists in your watchlist’); // //} } //$ (‘.accdiv’).html(”); //$ (‘.accdiv’).html(appndStr); } }, //complete:function(d){ // if(typparam1==1) // { // watchlist_popup(‘open’); // } //} }); }); } else { var disNam =’stock’; if($ (‘#impact_option’).html()==’STOCKS’) disNam =’stock’; if($ (‘#impact_option’).html()==’MUTUAL FUNDS’) disNam =’mutual fund’; if($ (‘#impact_option’).html()==’COMMODITIES’) disNam =’commodity’; alert(‘Please select at least one ‘+disNam); } } else { AFTERLOGINCALLBACK = ‘overlayPopup(‘+e+’, ‘+t+’, ‘+n+’)’; commonPopRHS(); /*work_div = 1; typparam = t; typparam1 = n; check_login_pop(1)*/ } } function pcSavePort(param,call_pg,dispId) { var adtxt=”; if(readCookie(‘nnmc’)){ if(call_pg == “2”) { pass_sec = 2; } else { pass_sec = 1; } var url = ‘//www.moneycontrol.com/mccode/common/saveWatchlist.php’; $ .ajax({url:url, type:”POST”, //data:{q_f:3,wSec:1,dispid:$ (‘input[name=sc_dispid_port]’).val()}, data:{q_f:3,wSec:pass_sec,dispid:dispId}, dataType:”json”, success:function(d) { //var accStr= ”; 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ICICI Direct’s research report on Vodafone Idea

In Q3FY21, Vodafone Idea’s (VIL) reported revenues were up 1% QoQ to Rs 10,894 crore, with ARPU growth of ~1.7% QoQ to Rs 121. The subscriber base declined by ~2 million to 269.8 mn, with churn rate reducing to 2.3%. Reported EBITDA margins were up 86 bps QoQ to 39.3%, on account of change in accounting of subscriber acquisition costs that aided reported EBITDA by ~Rs 330 crore. The EBITDA margin (ex-Ind-AS 116 impact), adjusted for one-offs was at 16.3% vs. 15.5% in Q2. The loss was at Rs 4532 crore, aided by lower depreciation costs and one-off exceptional items of Rs 1696 crore (benefits of Rs 2119 crore towards profit on sale of stake in Indus Tower partly offset by charge towards integration related costs, provision for additional depreciation and one-time spectrum charges).

Outlook

We maintain SELL with DCF based TP of Rs 6. We will monitor triggers like fund raise, tariff hike, before changing our stance.

For all recommendations report, click here

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