Vodafone Idea's shares extended its decline to seventh consecutive session 

What Happened: Vodafone Idea in its Q2 results posted a 17% improvement in net profit to ₹7,175 crore. Its revenue gained 2% from the previous year to ₹10,932 crore. Tariff hikes increased the Customer Average Revenue Per User (ARPU) to ₹166 compared to ₹154 in the first quarter of FY25.

What The Brokerage Said: Nuvama Institutional Equities retained a "hold" call while slashing the target price to ₹7 from ₹11.5. The brokerage said that while the company's revenue and ARPU grew on a quarterly basis, the decline of the overall subscription base has affected the company negatively. The 4G subscriber base fell 8 lakh quarter-on-quarter to 12.59 crore. 

The brokerage said that elevated subscriber loss was due to dual SIM consolidation and market share loss to BSNL. The company is also losing customers as the latter are upgrading to 4G/5G mobile sets and weak network coverage on the outskirts. 

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Supreme Court rejecting the company's curative petition asking for AGR dues has also dealt a big blow to the company, Nuvama added. 

Motilal Oswal also gave a neutral call to the company with a revised target price of ₹8. The brokerage said that the company is continuing to lose market share to its peers due to low ARPU translation on account of its inferior product mix and continued declines in subscribers. The brokerage believes that gaining subscribers back would be difficult for Vodafone due to the deeper pockets and the superior free cash generation of its peers. 

Price Action: Shares of Vodafone Idea fell 0.95% to ₹7.27 on Monday. 

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