Vodafone Idea share prices gains as telecom firms loss narrows in March quarter

Vodafone Idea (Vi) shares rise around 3 per cent during Friday’s session on the exchanges after the debt-ridden company’s consolidated loss during the March quarter narrowed. The stock hit the day’s high at Rs 7.2 per share minutes after opening and was trading at Rs 7.07 apiece, up over 1 per cent.

The Aditya Birla Group-backed company’s consolidated Q4 loss narrowed to Rs 6,418.9 crore in the quarter that ended on March 31, 2023, against a loss of Rs 6,563.1 crore in the same period a year ago.

The telecom firm’s consolidated revenue from operations rose by about 3 per cent to Rs 10,531.9 crore during the March quarter review from Rs 10,239.5 crore in the year-ago quarter.

However, the telecom company’s financial year 2022-23 (FY23) consolidated loss widened to Rs 29,297.6 crore as compared to a consolidated loss of Rs 28,234.1 crore in the fiscal year 2021-22.

VIL recorded the first-ever annual growth in revenue from operations post-merger. The company's consolidated revenue from operations grew by 9.5 per cent to Rs 42,177.2 crore from Rs 38,515.5 a year ago.

Management Commentary

"We are pleased to report annual revenue growth for the first-time post- merger on the back of consistently improving performance for the last several quarters. We continue to see growth in ARPU (average revenue per user) and 4G subscribers," Vodafone Idea CEO Akshaya Moondra said.

The growth in the annual revenue was supported by tariff hikes, improving subscriber mix and 4G subscriber additions, the company said.

VIL's average revenue per user – a key growth matrix – grew by 9.3 per cent year-over-year to Rs 135 during the reported quarter from Rs 124 a year ago.

Vodafone Idea’s subscriber base

The overall subscriber base of the company declined by about 7 per cent to 22.59 crore from 24.38 crore a year ago. However, the 4G subscriber base of VIL grew by 4.5 million to 12.26 crore during the reported quarter from 11.81 crore in March 2022 quarter.

The average data usage per 4G subscriber grew by about 9 per cent to about 15 GB from 13.86 GB in the March 2022 quarter.

Vodafone Idea’s debt

The company's total gross debt (excluding lease liabilities and including interest accrued but not due) as of March 31, 2023 dropped to Rs 2,09,260 crore from Rs 2,22,890 crore as of December 31, 2022 due to conversion of interest dues arising from the deferment of spectrum instalments and AGR dues into equity issued to the government.

After the issue of shares to the government, VIL promoter's holding in the company stands at 50.4 per cent and the government holds 33.1 per cent stake in the firm.

"We continue to remain engaged with our lenders for further debt fund raising as well as with other parties for equity or equity linked fund raising, to make required investments for network expansion, including 5G roll-out," Moondra said.

What Vi auditors say?

VIL's auditor note said that the Group's ability to continue as a going concern is dependent on raising additional funds as required, successful negotiations with lenders and vendors for continued support and generation of cash flow from operations that it needs to settle liabilities as they fall due.

The capital expenditure of VIL for the quarter stood at Rs 560 crore, taking the total capex spend for FY23 to Rs 3,360 crore.