Vodafone Idea Share Price is going to fall to Rs 5.70, Sell Side can make money
Vodafone Idea’s share price faced significant challenges following a Supreme Court ruling that upheld the company’s Adjusted Gross Revenue (AGR) dues. The stock plummeted by as much as 10%, reaching a price of ₹11.61 on the National Stock Exchange (NSE), marking a notable decline from the previous closing price. This development has raised concerns among investors regarding the company’s financial stability and future prospects.
Main Points
As of today, Vodafone Idea’s share price is quoted at ₹11.61, reflecting a sharp drop of 10% from its previous close. This decline is attributed to the Supreme Court’s dismissal of curative petitions filed by Vodafone Idea and other telecom companies. The court upheld the AGR dues, which currently stand at ₹70,300 crore for Vodafone Idea. This ruling has created uncertainty around the company’s ability to manage its debt and operational costs effectively.
Resistance and Support Levels:
- Resistance Level: The immediate resistance level for Vodafone Idea’s shares is seen around ₹13.25, which was its opening price today.
- Support Level: The stock has a critical support level at ₹11.91, which represents its lower circuit limit for trading.
Traders are closely monitoring these levels as they indicate potential points for price recovery or further decline. A breach below the support level could signal more selling pressure, while a rebound above resistance might restore some investor confidence.
Vodafone Idea has struggled with financial performance over recent quarters. The company reported a loss of ₹6,432.1 crore for the fourth consecutive quarter, indicating ongoing financial distress. The high-interest expenses have consumed a significant portion of its operating revenue—over 60%—leaving little room for growth or investment in new technologies like 5G.
Despite these challenges, Vodafone Idea’s stock has shown some resilience in the past three years, delivering a return of approximately 56.43%, outperforming the Nifty 100 index. However, this performance is overshadowed by recent developments that have raised questions about its long-term viability.
Market analysts have expressed mixed sentiments regarding Vodafone Idea’s future. Some believe that the recent Supreme Court ruling could hinder the company’s ability to raise funds necessary for operational improvements and debt servicing. According to IIFL Securities, without relief from the court regarding AGR dues, Vodafone Idea’s cash flow situation is expected to worsen.
On a brighter note, international brokerage firm Citi has maintained a buy rating on Vodafone Idea with a target price of ₹22 per share. They suggest that despite current challenges, there remains potential upside if the company can stabilize its operations and manage its debts effectively.
Looking ahead, analysts predict that Vodafone Idea’s sales could increase by approximately 18.7% over the next three quarters due to anticipated tariff hikes across the telecom sector. This forecast aligns with trends observed during previous tariff adjustments where operators generally benefitted from increased revenue streams. However, achieving this growth will depend significantly on how well Vodafone Idea can navigate its current financial difficulties.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
