Vodafone Idea Share Price may remain bullish till Rs 12.33, see important levels of next week
Vodafone Idea Ltd. is facing significant challenges in the stock market. The company’s share price has been on a downward trajectory, reflecting broader concerns about its financial health and market positioning. As of the last trading session, the stock was down by approximately 20% after the Supreme Court rejected its plea regarding Adjusted Gross Revenue (AGR) dues. This news has sent ripples through investor sentiment, leading to a cautious outlook for the upcoming trading day.
Main Points
As of September 19, 2024, Vodafone Idea’s share price was recorded at ₹13.21, a slight increase from ₹13.14 the previous day. However, this modest rise comes after a turbulent period where the stock has experienced a staggering decline of about 20% in recent weeks, primarily driven by negative analyst forecasts and legal setbacks.
The company has been grappling with ongoing financial difficulties, reporting losses for four consecutive quarters. The latest figures show a loss of ₹6,432.1 crore, raising alarms about its sustainability in the competitive telecom sector.
- Supreme Court Ruling: The most significant blow came when the Supreme Court rejected Vodafone Idea’s plea to recalculate its AGR dues. This ruling has intensified fears regarding the company’s ability to manage its financial obligations and maintain operations without further capital infusion.
- Goldman Sachs’ Negative Outlook: In recent analyses, Goldman Sachs issued a dire prediction for Vodafone Idea’s future, setting a target price of just ₹2.5 per share. This forecast suggests a potential downside of up to 83%, alarming investors and contributing to the stock’s sharp decline.
- Market Reactions: Following these developments, analysts have noted that Vodafone Idea shares have been consolidating within a range of ₹11 to ₹19 over the past several months. However, with current trading levels hovering around ₹13.21, there is speculation that if the stock falls below ₹11.80, it could further decline into single digits.
From a technical perspective, analysts suggest that Vodafone Idea’s stock is currently in a weak position. The shares have broken crucial support levels around ₹12-₹12.5 and are now heading towards potentially lower levels.
Chandan Taparia from Motilal Oswal Securities indicates that there are multiple support zones near ₹11.80, which could provide temporary relief if tested. However, should these levels fail to hold, it may open up further downside potential towards ₹10 or lower.
Investor sentiment remains cautious as Vodafone Idea navigates these turbulent waters. The company’s management is reportedly seeking new funding sources to shore up its balance sheet and meet AGR obligations. This could involve tapping into existing shareholders for additional capital or exploring other financing avenues.
Despite these efforts, analysts warn that competition in the telecom sector is intensifying, with rivals potentially raising tariffs in response to financial pressures faced by all players in the market
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.
