Vodafone Idea shares jump 3% after Q1 net loss narrows. What is Nomura saying?

EBITDA increased 9% YoY to Rs 5,034 crore from Rs 4,612 crore. The EBITDA margin improved to 43.1% from 41.8% in Q1FY26 and remained unchanged from 43.1% in Q4FY26. Average revenue per user (ARPU) climbed 10.2% to Rs 195 from Rs 177 in the year-ago quarter. Vodafone Idea said this was the highest ARPU growth in the industry.

The company's combined 4G and 5G subscriber base rose to 130.1 million from 127.4 million in Q1FY26. Vodafone Idea said its 5G services are now available across more than 200 Indian cities and towns, while its 4G network covers 87% of the country's population.

Nomura on Vodafone Idea

The foreign brokerage maintained Neutral on Vodafone Idea with a target price of Rs 12.60, saying the company's Q1FY27 performance was broadly in line with expectations, while the three-year capex programme has now kicked off. Nomura said management commentary on the planned debt raise will be a key monitorable, with progress on the fundraise also likely to benefit Indus Towers.Also read:NSE indices rejig: Vodafone Idea, Wipro part of major changes in Nifty Next 50 and Nifty 100.

The brokerage retained its Rs 12.60 target price, based on 14x FY28F EV/EBITDA, and said it prefers Bharti Airtel among telecom stocks under its coverage. Key catalysts for Vodafone Idea include a successful debt raise, industry tariff hikes, faster subscriber additions and a strategic equity investment.

Vodafone Idea Q1 highlights

Capex for the quarter stood at Rs 1,930 crore. The company said it has already placed capex orders worth Rs 9,000 crore out of its three-year capex guidance of Rs 45,000 crore.Vodafone Idea Q1 management commentary

Abhijit Kishore, CEO of Vodafone Idea, said FY27 is the year of execution for the company. "Our robust Q1FY27 performance is a strong validation of our defined strategy and disciplined execution,” Kishore said.Read more:Vodafone Idea shares rally 80% in less than 3 months. Time to buy or avoid?

"During the quarter, we have delivered on all the critical business parameters we measure our success on, including subscriber addition -- first since merger -- and we will continue to drive this," he said.

Kishore added that ongoing discussions with lenders give the company confidence of successful closure of debt talks.

Vodafone Idea shares are up 12% on a YTD basis and about 9% in the last six months.

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