Vodafone Idea stock up as Q4 loss narrows to ₹6,418 cr

Vodafone Idea (Vi) has reported a consolidated net loss of ₹6,418 crore in the January-March quarter over increasing operating expenses, though the telco has trimmed down its losses for the said quarter. During the same quarter last year (Q4 FY22), Vodafone Idea's net loss stood at ₹6,563 crore, while it was ₹7,988 crore in the previous quarter.

Vi's revenue from operations surged 3% on a year-on-year (YoY) basis to ₹10,532 crore from ₹10,239 crore in the same quarter last year. The revenue surge was aided by an improvement in subscriber mix and 4G subscriber additions. Vi reported a decline in EBITDA and EBITDA margin for the said quarter at ₹4,210 crore, down from ₹4,649 crore in the year-ago period, and 40%, down from 45.4% YoY, respectively.

The average revenue per user (ARPU) improved to ₹135, up 9.3% YoY vs ₹124 in Q4 FY22, primarily aided by migration of subscribers to higher ARPU plans. The 4G subscriber base also grew and with 1.1 million 4G customers added in Q4, the 4G subscriber base stood at 122.6 million. However, the overall subscriber base declined to 225.9 million vs 228.6 million in Q3FY23, the company said.

The Vodafone Idea share has opened 0.71% up at 7.05 on the National Stock Exchange today. The stock has surged 7.63% in the past month but has been down 12.42% in the past six months and 11.88% in the year-to-date period.

Vi said the annual revenue, for the first time since the merger, improved compared to last year. For the full fiscal year, the telco's revenue grew by 9.5% from ₹38,520 crore to ₹42,180 crore, supported by tariff hikes, improving subscriber mix, and 4G subscriber additions. As a result, EBITDA increased from ₹6,680 crore to ₹8,300 crore, registering strong growth of 24.1%. EBITDA margin at 19.7% is the highest post-merger.

Vi's capex spend for the quarter stood at ₹560 crore, taking the capex spend for FY23 to ₹3,360 crore. Cash-strapped telco's gross debt, excluding lease liabilities and including interest accrued, as of Mar 31, 2023, stood at ₹2,09,260 crore as of March 31, 2023, vs ₹2,22,890 crore as of December 31, 2022, "due to conversion of debt representing NPV of interest arising due to deferment of spectrum installments and AGR dues into equity issued to the Centre".

This comprises deferred spectrum payment obligations of ₹1,30,710 crore and AGR liability of ₹65,550 crore that are due to the government, debt from banks and financial institutions of ₹11,390 crore and optionally convertible debentures amounting to ₹16,100 crore.

The telco had opted for the "upfront conversion of interest arising due to deferment of spectrum installments and AGR dues" into equity. On February 3, 2023, the government directed the company to issue equity shares against the loan of ₹161.33 billion, representing the NPV of interest arising due to deferment. The board allotted 16.13 billion equity shares of the face value of ₹10 each at an issue price of ₹10 each. With this issuance, the promoter shareholding stood at 50%, and the GoI shareholding at 33%.