Brokerage firm Motilal Oswal has lowered its recommendation for Vodafone Idea (Vi) stock from ‘neutral’ to ‘sell’ because the company is losing market share and is not stable financially. They believe the stock could drop by 40%, setting a target price of Rs 5.
Vodafone Idea is struggling to keep customers as many are switching to other companies. Bharti Airtel is doing well, gaining more market share in the last quarter. Vi’s current problems are worsening due to a mix of low revenue per user and many people leaving their network.
Vi plans to invest a lot of money—about Rs 500-550 billion—over the next few years to improve its network. However, Motilal Oswal thinks it will be challenging for Vi to win back customers, as its competitors have more money to spend.
While raising prices might help Vi earn more money, many subscribers are still leaving. The firm’s ability to invest depends on taking on more debt, which is linked to receiving government support. Starting in the first half of FY26, Vi must pay back over Rs 44,000 crore to the Indian government, and if they can’t borrow money, they might face financial trouble.
CEO Akshaya Moondra feels hopeful and believes the Indian government will find a way to support Vi, especially since they have already raised Rs 26,000 crore.
He mentioned that the recent decision by the government to lift certain restrictions shows they are committed to helping the telecom industry.
As of today, Vodafone Idea’s shares rose by 5.6% to Rs 8.88.
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