- Vodafone Idea share price ended at ₹10.52 apiece on the NSE after hitting a new 52-week low of ₹9.79 on Friday
share price: After the Supreme Court did not find relief on AGR dues, Vodafone Idea shares witnessed a strong sell-off last week and touched a new 52-week low of ₹9.79 apiece during Friday deals. However, the beaten-down stock witnessed strong buying at the lower levels and finished green at ₹10.52 per share, logging a 7.50 per cent rise against the 52-week high.
According to the global brokerage Nuvama, the market had not factored in any upside in Vodafone Idea share price due to the Supreme Court reducing AGR dues. Hence, there can be a sharp recovery in the telecom stock as the rest of the fundamentals exist as they were at the beginning of the previous week. The brokerage said that Vodafone Idea has support from the Government of India (GoI), which is enough to fill the materialization of the funding gap. Nuvama said that the worst for the Vodafone Idea has passed, and the Vodafone Idea share price may touch ₹15 apiece in the medium to long term.
Triggers for Vodafone Idea shares
“The Supreme Court (SC) dismissed VIL’s Curative Petition for relief on its AGR dues of INR703bn. VIL’s stock price declined sharply by 20% following the announcement as the Street had factored in a relief of ~50% on VIL’s overall AGR dues. Unlike the Street, we had not factored any upsides to VIL from the SC reducing VIL’s dues as the past view of the court was amply clear on the same,” said Nuvama.
GoI support holds key
“In FY26F, VIL will generate ₹224 bn of EBITDA, and its EBITDA generation will be used to meet government dues, which stand at ₹290 bn partly; however, as indicated by VIL in the past, it is likely to use the option to convert government dues into equity — to this end, VIL will be able to convert ₹120 bn of dues into equity and will be able to manage to repay the remaining of ₹170 bn through its EBITDA generation,” Nuvama said adding, “In FY27F, VIL will generate ₹261bn of EBITDA. Payments to the government will increase sharply to ₹430 bn; out of this, VIL will be able to convert ₹170 bn of dues to equity and pay the remaining ₹260 bn through its EBITDA.”
