Why Vodafone Idea shares fell despite Rs 51,986 crore Q4 profit? Is this an entry point?

Vodafone Idea share: Shares of Vodafone Idea fell more than 2 per cent in early trade on Monday even after the telecom operator reported a sharp jump in fourth-quarter profit, helped largely by a one-time accounting gain linked to the reassessment of Adjusted Gross Revenue (AGR) dues.

At around 9:55 am, Vodafone Idea shares were trading at Rs 12.68, down 2.08 per cent on the NSE. The stock opened at Rs 12.74 and touched an intraday high of Rs 13.05. The company’s market capitalisation stood at around Rs 1.37 lakh crore.

The telecom company posted a consolidated net profit of Rs 51,986 crore for the March quarter, compared with a loss of Rs 5,284 crore in the December quarter and a loss of Rs 7,167 crore a year ago.

However, the sharp profit surge was mainly driven by exceptional gains of Rs 57,491 crore arising from the reassessment of AGR liabilities.

What led to Vodafone Idea’s Q4 profit surge?

Vodafone Idea said a financial liability of Rs 80,502 crore as of December 31, 2025, was derecognised after the AGR reassessment process. The company then recognised a revised liability of Rs 24,880 crore, representing the present value of future payments.

The difference of Rs 55,622 crore, along with the impact of related provisions, was credited to the profit and loss account as exceptional income during the quarter.

Earlier this year, the Department of Telecommunications (DoT) had informed Vodafone Idea that AGR dues frozen as on December 31, 2025, stood at Rs 87,695 crore and were subject to reassessment.

Later, on April 30, Vodafone Idea received a communication from the DoT stating that the reassessed AGR dues for FY07 to FY19 had been finalised at Rs 64,046 crore.

Vodafone Idea’s AGR payment schedule

Under the revised payment structure, Vodafone Idea will pay at least Rs 100 crore annually between March 2032 and March 2035. After that, the company will pay Rs 10,608 crore annually from March 2036 to March 2041.

The company also has to pay Spectrum Usage Charges (SUC) dues of Rs 609 crore with interest for FY18 and FY19. These payments will be made in six annual instalments of Rs 124 crore between March 2026 and March 2031. Vodafone Idea said it already paid Rs 124 crore in March 2026.

Revenue, EBITDA show modest growth

Vodafone Idea reported quarterly revenue of Rs 11,332 crore, up 2 per cent year-on-year. On an equal day basis, revenue increased 2.3 per cent sequentially.

EBITDA for the quarter stood at Rs 4,889 crore, rising 4.9 per cent from the year-ago period. EBITDA margin expanded to 43.1 per cent.

The company’s blended average revenue per user (ARPU) improved to Rs 174 per month during the quarter.

Subscriber trends also remained largely stable, with the user base standing at around 192.8 million.

Vodafone Idea to raise Rs 4,730 crore

Separately, Vodafone Idea’s board approved a Rs 4,730 crore fundraising plan through warrants convertible into equity shares.

The company will issue up to 430 crore warrants to Suryaja Investments Pte. Ltd., a Singapore-based promoter group entity of the Aditya Birla Group, at Rs 11 per warrant on a preferential basis.

The fundraising move is seen as a promoter-backed capital infusion aimed at improving the company’s funding visibility.

What brokerages said

Brokerage firm Citi maintained its “Buy” rating on Vodafone Idea with a target price of Rs 14. Citi said improving operating metrics, the AGR reset, and promoter support could help the company secure long-pending bank funding.

UBS maintained a “Neutral” rating with a target price of Rs 12.40. UBS said Vodafone Idea is showing early signs of operational turnaround, but added that the company still requires a much larger equity or debt raise to sustain recovery.

Meanwhile, Macquarie retained its “Underperform” rating with a target price of Rs 9. Macquarie noted that the company’s net income was boosted by a one-off AGR-related gain and highlighted that Vodafone Idea still carries government dues of nearly US$16 billion.