Vodafone Idea Reports Lower-Than-Expected Q1 FY25 Loss

The Indian telecommunications company Vodafone Idea, also referred to as Vi, has its main offices in Gandhinagar and Mumbai. It is a GSM operator that is integrated throughout all of India and offers mobile phone services. As of June 30, 2024, Vi has a subscriber base of 219.08 million, making it the third-largest mobile telecommunications network in India and the 12th largest globally.

Vodafone Idea Q1 FY25 results:

Vodafone Idea (Vi) reported its Q1 FY25 results yesterday, showing a nearly 18% decrease in net loss to Rs. 6,432 crore compared to Rs. 7,840 crore in the same quarter of FY24. This improvement is attributed to lower interest and financial costs. Vi revenue is marginally down by 1.38% in the current quarter, from Rs. 10,606.8 crore to Rs. 10,508.3 crore.

The interest and financing expenses of the telecommunications company (telco) dropped to Rs 5,262 crore in Q1, a 17.6% decrease from Rs 6,376 crore in the same quarter last year. According to Q4 figures, the quarter’s average revenue per user (ARPU) was Rs. 146. During the first three quarters of the previous fiscal year, it was Rs 145, Rs 142, and Rs 139 in that order. The annual rate of return (ARPU) rose by 4.5% YoY. .

According to the company, Q4 was the 12th consecutive quarter that 4G subscriber additions occurred. There were 126.7 million 4G subscribers as of the most recent quarter, up.3% from the 126.3 million users registered the previous quarter. Even still, the business continued to lose consumers to its bigger competitors, Bharti Airtel and Reliance Jio, ending the first quarter with 2.5 million fewer users. This is marginally less than the 2.6 million lost subscribers from the previous quarter that were disclosed.

Nonetheless, the churn rate has continued to decrease, as the company lost 4.6 million users in the third quarter of FY24. The total payment obligations to the government amounted to Rs 2.09 trillion at the end of Q1, which included deferred spectrum payment obligations of Rs 1.39 trillion. Additionally, the company had an adjusted gross revenue liability of Rs 70,320 crore to the government.

In a significant relief for the telco, the debt from banks and financial institutions decreased to Rs 4,650 crore in Q1, down from Rs 9,200 crore a year ago.

Akshay Moondra CEO words for VI:

Vodafone Idea Limited’s CEO, Akshaya Moondra, stated that the company is currently working on launching 5G services in addition to increasing 4G capacity and coverage following the most recent equity raise. We anticipate that by the end of September, we will have increased our data capacity by 15% and the number of people covered by 4G by 16 million, thanks to some capital expenditures that have already been ordered and are being implemented. We are currently using equity funds to cover our Capex needs. 

VI stock price:

Vodafone Idea’s stock price is down by nearly 3% today, with the current stock trading at Rs. 15.59 per share. This decline is attributed to the Q1 FY25 results.

Conclusion: Vodafone Idea (VI) is struggling with revenue, but the positive aspect is that they are making efforts to decrease losses quarter by quarter. With the recent equity raise, we can foresee a promising future with the launch of 5G services.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.