Vodafone Idea at new record low

Vodafone Idea is the top loser on the BSE, hitting a new 52-weel low at Rs.7.31, going down over 21% and remains completely sunk in the red zone.

The market is very disappointed with the company’s earnings for Q1FY20. On a 4% (QoQ) drop in consolidated revenue at Rs.11,270 crore, the company posted a net loss at Rs.4874 crore v/s loss of Rs.4882 crore in Q4FY19.

Cost synergy, adoption of Ind AS 116 helped boost the EBITDA, which showed a sharp rise from Rs.3650 crore v/s Rs.1790 crore (QoQ) and margins too showed a sharp rise from 15.2% to 32.4%.

What really impacted by the churn of customers who had recharged on service validity plans in Q4FY19, which did not carry forward into Q1FY20.  So on one hand high-paying customers went for lower plans in the post-paid segment and low-paying customers who had recharged under the miniumum Rs,35/month scheme in Q4, fell sharply in Q1.

Following this, its subscriber base has declined to 320 million from 334.1 million (QoQ). Its ARPU now stands at Rs.108, up 3.8% (QoQ) but this was due to striking off of low paying 2G subscribers. 

The merger of Bharti Infratel and Indus Towers is expected to close by September 2019.

The company is also exploring options to monetise over 159,000 km of intra-city and inter-city fibre which will provide further financial flexibility.

Vodafone Idea’s capex spend for Q1FY20 was Rs 2,840 crore. Gross debt as at June 30, 2019 was Rs 1.20 lakh crore, including deferred spectrum payment obligations due to the government of Rs 89,180 crore but excluding lease liabilities. Gross debt as at March 31, 2019 was Rs 1.26 lakh crore.

Cash & cash equivalents were Rs 21,180 crore resulting in a lower net debt of Rs 99,260 crore versus Rs 1.18 lakh crore in Q4FY19, and Rs 1.15 lakh crore in Q3FY19.