Weak performance by Vodafone Idea

News: Vodafone Idea’s (VIL) Q3FY22 performance was weak. Reported revenues were up 3.3% QoQ to Rs.9,717 crore.  ARPU grew ~5.5% QoQ to Rs.115, on expected lines, as company saw partial pass through of tariff undertaken in November 2021 end.   The subscriber base decline, however, continued at ~8.2 million. 4G sub base saw addition of merely 0.8 mn QoQ to 117 million. The post-paid sub base at 19 mn, however, was down by 1 mn QoQ. Reported EBITDA margins was down 179 bps QoQ to 39.3%. The reported loss stood at Rs.7319 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. 

Impact: Neutral