Vodafone Idea may report over Rs 4,000 crore loss in Q2
Analysts fear for Vodafone Idea’s survival in the absence of any government help.
The company is slated to announce its financial results for Q2FY20 on Thursday later in the day.
Brokerage firm ICICI Securities sees a net loss of Rs 4,601 crore for the telecom firm with flattish average revenue per user (ARPU) at Rs 108. It also projected a 3.20 per cent QoQ fall in revenue at Rs 10,906 crore.
The stock was buzzing in Thursday’s trade after ET reported that Aditya Birla Group will not infuse any fresh equity into Vodafone Idea Ltd, its telecom joint venture with Vodafone Group of UK, and let it opt for insolvency if the government does not provide substantial relief, including on the telco’s adjusted gross revenue (AGR)-based dues, which could be over Rs 39,000 crore.
Shares of the company were trading 16 per cent down at Rs 3.10 in morning trade, while the benchmark BSE Sensex was up 155 points, or 0.39 per cent, at 40,271 at around the same time.
Analysts also fear for Vodafone Idea’s survival in the absence of any government help.
“Assuming no near-term respite in the form of supportive measures, the odds are against the possibility of Vodafone Idea’s survival. It looks increasingly plausible to believe that in absence of any regulatory or policy-driven relief, the Indian telecom space may get reduced to a two private player market,” said SBICap Securities in a recent report. It was referring to Reliance Jio and Bharti Airtel as the two survivors, besides two state-run telcos.
Vodafone Plc on Tuesday said operating loss from its India business widened to €692 million in April-September from €133 million in the same period last year. It also cut the Indian unit’s “carrying value” to zero, and said that Vodafone Idea doesn’t contribute anything to the UK company’s share price.
An assessment by Edelweiss Securities projected an adjusted net loss of Rs 4,411.10 crore for Vodafone Idea in Q2FY20. It also sees 6.10 per cent QoQ and 3.60 per cent QoQ fall in EBITDA and revenue.
“We expect Vodafone Idea’s revenue to drop 3.6 per cent QoQ, due to 4.9 mn decline in subscriber base during the quarter. We are expecting an ARPU of Rs 107 for the quarter, signalling a marginal decline of around 1 per cent largely due to seasonal weakness,” Edelweiss Securities said in a report.