Vodafone Idea Share Price Future: Stock hit ₹10.33, Impact of SC confirming ₹58,000 crore AGR dues
Vodafone Idea Ltd. (VIL) experienced a significant decline in its share price, plummeting by 20% to reach a low of ₹10.33. This sharp drop followed the Supreme Court’s rejection of the telecom operator’s plea to re-evaluate its adjusted gross revenue (AGR) dues, which has been a contentious issue for the company and the telecom sector as a whole.
Main Points
Background on AGR Dues
The AGR dues have been a major financial burden for Vodafone Idea. The Supreme Court had previously confirmed an AGR demand from the Department of Telecom (DoT) amounting to approximately ₹58,000 crore. This demand includes penalties and interest, which have compounded the financial challenges faced by the company. VIL’s self-assessed liability was significantly lower at about ₹35,400 crore, but the court’s dismissal of their plea means that they must now contend with the full amount.
As of today, Vodafone Idea shares traded at ₹10.33 after hitting a 52-week low. The stock has seen a staggering decline of 33.14% year-to-date (YTD). The trading volume was notably high, with around 12.75 crore shares changing hands on the Bombay Stock Exchange (BSE), far exceeding the two-week average of 4.79 crore shares.
The market capitalization of Vodafone Idea now stands at approximately ₹478.96 crore, reflecting investor concern over the company’s ability to manage its debts and operational costs effectively. Analysts have noted that the stock is trading below all major moving averages, indicating a bearish trend in the short term.
Market analysts are painting a grim picture for Vodafone Idea’s future. Akshay Bhagwat from JM Financial Services suggested that investors consider exiting their positions in VIL stock due to its weak performance and potential for further declines. He indicated that the stock has broken through significant support levels and may continue to slide downwards towards ₹9 or even lower in the near future.
Osho Krishan from Angel One echoed similar sentiments, stating that resistance levels are now set at ₹12.50-₹13.50, while support lies around ₹10-₹9.50. The technical indicators suggest that unless there is a significant turnaround, the stock may struggle to regain its footing.
Vodafone Idea’s financial health remains precarious, with key metrics reflecting ongoing challenges:
- Market Capitalization: Approximately ₹478.96 crore
- P/E Ratio: -3.01
- P/B Ratio: -0.87
- EPS: -4.29
- Return on Equity: 28.82%
These figures highlight not only the company’s ongoing losses but also its inability to generate positive earnings per share (EPS), which is crucial for attracting new investors.
Despite today’s setback, some analysts remain cautiously optimistic about Vodafone Idea’s long-term prospects if it can successfully navigate its financial challenges. International brokerage Citi has maintained a buy rating on VIL stock with a target price of ₹22 per share, suggesting potential upside if the company can stabilize its operations and address its debt situation effectively.
However, without relief from court rulings regarding AGR dues and continued competition from rivals like Bharti Airtel and Jio, Vodafone Idea’s path forward appears fraught with 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.
