Vodafone Idea zoomed by 10% hitting the upper circuit today; Is there something cooking?

The shares of Vodafone Idea Ltd experienced a sharp rise today, hitting the upper circuit. It began the day at Rs 8, a substantial 1% up compared to the previous day’s closing price of Rs 7.92. The stock surged by 10% during the intraday session with significant volume.

Currently, while writing this article, the shares of the company are up by Rs 0.79 and at Rs 8.71 on BSE. Upon analysing today’s share volumes, it can be observed that there has been a significant increase of more than 3.02 times in volumes on the BSE. 

The stock’s 52-week highs and lows stand at Rs 10.08 and Rs 5.70, respectively. With a market capitalisation of Rs 42,400 Crore, the stock has displayed remarkable performance in recent times especially when analysed in a shorter time period, delivering a 13% return in just one week and an impressive 33% return in the last three months.

As of now, there has been no leaked information to explain the recent share price movement. However, there might be internal developments within the organization or significant news expected soon that could be driving these changes. To gain clarity, we’ll have to remain patient and keep a close eye on developments as they unfold. 

Financial Performance 

If we check the company’s financials, in FY23 annual revenue experienced a substantial increase of 9.51% YoY, rising from Rs 38,516 Crore to Rs 42,177 Crore. The operating profit of the company stands at Rs 16,753 Crore, accompanied by an operating profit margin of 40%. The company posted a net loss of Rs 29,301 Crore.

According to the latest available information, the debt on its balance sheet has increased from Rs 40,647 Crore to Rs 49,411 Crore in FY23. 

Regarding ownership, the promoters of the company possess 50.36% of the company’s shares. Whereas both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 2.29% and 0.73% in the company. The Government holds 33.18% of the company while the remaining portion, which accounts for 13.44%, is owned by public investors.

Surprisingly, in the June quarter of FY24, both FIIs and DIIs raised their stakes compared to the March quarter, while public shareholding decreased during this period. 

Business Overview 

Vodafone Idea Limited is an Indian telecommunications service provider that operates in the mobility and long-distance communication sector. The company offers nationwide voice and data services using 2G, 3G, and 4G platforms. In addition to serving individual customers, Vodafone Idea also provides communication solutions to various entities, including global and Indian corporations, public sector organizations, government bodies, small and medium enterprises, and start-ups through its Vodafone Idea business services. 

The company’s service portfolio includes voice services, broadband services, as well as content and digital offerings. Among its entertainment services are sports content, interactive voice response (IVR)-based content, and wireless application protocol (WAP)-based games. Vodafone Idea also offers voice and short message services (SMS)-based options such as caller tunes, voice and SMS chat, star talk, expert advice, and subscription services. Additionally, the company provides utility services like missed call alerts, doctor-on-call facilities, and astrology 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.