Vodafone Idea shares jump 4% to fresh record high but Nomura, other brokerages remain cautious; here’s why

The shares of the telecom major jumped to a fresh 52-week high of Rs 13.40 apiece on Tuesday morning. The shares of the company have jumped more than 39% in one month and have gained 15% in 2026 so far.

Vodafone Idea on Saturday released its results for the January-March quarter of the financial year 2026. It reported a net profit of Rs 51,970 crore for the quarter under review as against a net loss of Rs 7,166 crore in the year-ago period, primarily driven by a one-time accounting gain related to the reassessment of AGR dues and recognition of the present value of future AGR payments.

Also Read | Vodafone Idea shares drop 4% on muted Q4 revenue growth, one-time gain in profit

The firm’s revenue from operations meanwhile rose 3% year-on-year (YoY) to Rs 11,332 crore during the quarter which ended on March 31, 2026, from Rs 11,017 crore in the corresponding quarter of the previous financial year. EBITDA grew 4.9% YoY to Rs 4,889 crore, while Average revenue per user, or ARPU, rose to Rs 190 from Rs 175 in the year-ago quarter, marking an 8.3% increase.

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Nomura on Vodafone Idea

Nomura downgraded the shares of Vodafone Idea from ‘Buy’ to ‘Neutral’, but increased its target price to Rs 12.60 apiece. This implies a downside potential of more than 2% from the stock’s previous closing price.
The international brokerage highlighted that the company’s management has outlined a three-year strategic plan in which VIL is going to invest Rs 45,000 crore over the next three years. “To support liquidity, VIL plans to raise Rs 25,000 crore of bank funding and Rs 10,000 of non-funded facility in the near term. We think that if VIL is able to raise this bank funding, it would be a key positive for the business given its capex plan is dependent on it, which may eventually translate into arresting its subscriber loss, and realising higher ARPU from a mix of customer upgrades and higher tariffs. We also note that the government’s 27% AGR relief, with payment moratorium and issuance of preferential warrants worth Rs 4,730 to promoter entity, should support VIL’s ability to raise debt capital sooner rather than later,” it added.
However, Nomura downgraded its rating on the stock due to limited potential upside from current levels. However, it values the stock based on 14x FY28 EV/EBITDA, higher than 12x that it assigned to Bharti Airtel and Jio, given Vodafone Idea’s higher earnings CAGR potential.

“We prefer Bharti Airtel among the telecom stocks under our coverage,” Nomura said, while highlighting the key catalysts for Vodafone Idea, which include successful debt-capital raise, industry tariff hikes, a reversal of the subscriber loss trend, and a strategic equity investment that may provide the much-needed confidence capital. However, key risks include a slowdown in subscriber addition and ARPU growth that could disappoint investors and might push stock back into bear territory, the brokerage added.

Nuvama retained its ‘Hold’ rating on the stock, but increased its target price to Rs 13.5 apiece. The brokerage highlighted that the company reported a decent Q4 performance. “KPIs like subscriber addition, ARPU and churn rates are improving but a lot more needs to fall into place for VIL to become an investible idea,” it highlighted.

“VIL appears to be making steady progress with improvement in ARPU and subscriber additions on one hand and reassessment of AGR dues and the 10-year moratorium on the other. However, investor attention remains focused on the delayed debt fund raise, which is critical to support capex, along with sustainability of subscriber net addition and ARPU growth,” Nuvama further said.

Motilal Oswal on Vodafone Idea

Motilal Oswal Financial Services maintained its ‘Neutral’ rating on the shares of Vodafone Idea, with a target price of Rs 10 apiece, implying a downside potential of 22% from the stock’s previous closing price. “Everything must go right for the long-term revival,” the domestic brokerage said.

“We believe Vi’s revival hinges on sustained tariff hikes or a change in tariff construct, stabilization in consumer wireless subs trends, more rational competition on subscriber acquisition, and continuation of a benign regulatory regime, with further relief on spectrum payments,” Motilal said, adding that not all of these variables are within management’s control.

Additionally, if Vodafone Idea begins to emerge as a competitive third player, Motilal expects peers with superior FCF generation, network, and product offerings to respond with heightened competitive intensity.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)