- 11 May 2022
- ICICIdirect Research
Vodafone Idea's lower network opex drives EBITDA beatIDEA - 8 Change: 0.60 (8.51 %)
News: Vodafone Idea’s (VIL) Q4FY22 performance was mixed bag. While the tariff hike partial pass through was lower than expected, margins saw improvement led by lower network opex (party with one-off benefits). Reported revenues were up 6.6% QoQ to Rs 10,240 crore, as ARPU grew by ~7.8% QoQ to Rs 128, lower than 12% QoQ growth expected. The subscriber base declined at ~3.4 million (vs. 8.2 mn in Q3), with churn rate at 3.4%. 4G sub base saw addition of merely 1.1 mn QoQ to 118.1 million. Reported EBITDA margins was up 613 bps QoQ to 45.4% owing to lower than expected network opex (which was down 20% QoQ and had Rs 150 crore of one-off benefits). Adjusted margins was at 43.9%. The reported loss stood at Rs 6563 crore
Views: While government relief (option of conversion of dues into equity) ensures the survival, the company needs to raise capital as early as possible to stay competitive. Subscriber churn also needs to be controlled, while network spends lags vis-à-vis peers.