BUY Vodafone Idea shares after Q3 Results?

Vodafone Idea shares will be in focus on Wednesday after the telco reported a narrower loss for the December quarter. Results were announced after market hours on Tuesday. The stock closed at Rs 9.89, down 0.40 per cent.

Q3 results at a glance

• Vodafone Idea narrowed its consolidated net loss to Rs 5,286 crore in Q3FY26 from Rs 6,609 crore a year ago.
• Revenue rose 1.85 per cent year-on-year to Rs 11,323 crore.
• EBITDA increased to Rs 4,816 crore from Rs 4,712 crore last year.
• Finance costs fell marginally to Rs 5,632 crore.

Why the loss narrowed

The company benefited from lower finance costs and a modest improvement in operating performance.
Average revenue per user (Arpu) rose to Rs 186 in Q3FY26 from Rs 173 a year ago and Rs 180 in the previous quarter.
Data usage and customer upgrades supported Arpu growth.

AGR relief changes the picture

Vodafone Idea said it is confident of meeting its obligations over the next 12 months.
This follows the government’s decision to provide a 10-year breather on adjusted gross revenue (AGR) payments.

• AGR dues have been frozen at Rs 87,695 crore as of December 31, 2025.
• The company will pay Rs 124 crore annually for six years from March 2026.
• It will then pay Rs 100 crore annually for the next four years.
• The balance will be paid in instalments between FY36 and FY41.

Management commentary

• Chief executive officer Abhijit Kishore said Q3 marked an “important inflexion point”.
• He highlighted the settlement of Rs 6,394 crore contingent liability with Vodafone Group.
• The company also raised Rs 3,300 crore through non-convertible debentures during the quarter.
• Kishore said these steps have strengthened discussions with lenders and will support future capex.

Subscriber trends remain weak

• Vi’s 4G and 5G subscriber base rose to 128.5 million.
• However, the total subscriber base fell to 192.9 million from 199.8 million a year ago.
• This points to continued customer losses.
• Vi’s Arpu remains the lowest among peers, well below Bharti Airtel and Reliance Jio.

Balance sheet and capex

Bank debt declined to Rs 1,126 crore in December from Rs 1,542 crore in September.
Cash and bank balance stood at Rs 6,963 crore, including NCD proceeds.
Quarterly capex rose sequentially to Rs 2,252 crore.

What this means for you

• Losses are narrowing, but the business is still under pressure.
• AGR relief eases near-term cash flow stress.
• Subscriber losses and low Arpu remain key risks.
• The stock may react to management commentary on funding and 5G rollout.

Should you buy Vodafone Idea shares?

UBS has maintained a Neutral rating on Vodafone Idea shares with a target price of Rs 12.40. The brokerage said Q3FY26 results were broadly in line with expectations, though customer losses continue. UBS will monitor the company’s capex plans, 5G rollout progress, debt-raising efforts, and developments on AGR dues to assess near- to medium-term performance.

• Revenue was up 1.1% QoQ (+1.9% YoY, in line with UBSe), with a blended ARPU increase of 3% QoQ to Rs172 (1.6% above UBSe).
• EBITDA was up 2.8% QoQ (+2.2%YoY, in line with UBSe) with EBITDA margin up c70bps QoQ (+15bps YoY, in line with UBSe) at 42.5%
• Will look for commentary on
• 1) ongoing capex & deployment, 2) progress on launches of 5G services , 3) updates on planned debt raise, 4) further developments on AGR dues, 5) overall outlook for near-medium term.