After Yes Bank, Vodafone Idea (aka Vi) is another company whose shares have seen a bloodbath in the last 5 years. The Vodafone Idea stock has fallen nearly 85% from its all-time high price in 2018.
In this blog post, I will analyze the factors that are likely to influence share prices in the coming years and provide an estimate of Vi’s target price in 2025.
What Will be Vodafone Idea Shares Target Price by 2025
Vodafone Idea stock is currently trading at Rs 6 to Rs 7 price levels. According to current analyst opinions, the consensus price target for Vodafone Idea’s shares in 2025 is around Rs. 10. This is based on the company’s current financial performance and growth prospects, as well as the overall economic conditions in India.
Some analysts believe that Vodafone Idea’s shares have the potential to rise if it manages to raise funds and reduce the debt in upcoming years.
Price targets are based on a combination of fundamental and technical analyses of Vodafone Idea’s performance. You can check the list of best stock broker in India to invest in Vodafone Idea stocks.
Let’s have a look at the fundamental & technical analysis of Vodafone Idea.
Fundamental Analysis of Vodafone Idea Stocks
Let’s look at some of the factors that experts considered in their reports to understand the fundamental analysis of Vodafone Idea:
Revenue growth: Vodafone Idea’s revenue growth has increased for the last 1 year with a 1-year CAGR of 8.7%. However, Vodafone Idea’s revenue growth for the last 5 years is merely at 2% CAGR.
However, Vodafone Idea’s revenue from operations increased by 9% to Rs 10,620 crore from Rs 9,717 crore year-on-year (YoY).
|Year||Revenues (in Crores)|
|2022-23 (3 Quarters)||31,265|
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Profitability: Vodafone Idea has incurred losses for the last couple of years. Vodafone Idea reported a net loss of Rs 7,990 crore for the Dec 2022 quarter which is higher than the previous quarter’s (Sep 2022) loss of Rs 7,595.5 crore.
|Year||Profit (in crores)|
|2022-23 (3 Quarters)||-29,445|
Management quality: Recently, Mr. Kumar Mangalam Birla has been appointed as an Additional Director (Non-Executive and Non-Independent) after the resignation of Mr. K. K. Maheshwari.
This move is potentially aimed at restoring investor confidence in the company.
Mr. Birla has also been in discussions with investors to raise funds amounting to Rs 11,000 crore. The plan is to raise this capital through a convertible debt structure.
The purpose of this fundraising is two-fold:
- Firstly, to increase the promoter equity
- Secondly, to allocate funds towards the maintenance and upgrading of Vi’s network services, which have been falling behind significantly.
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Technical Analysis of Vodafone Idea Shares
Vodafone Idea’s share price will likely be influenced by market sentiment and news flows in the short term. Over the longer term, the company’s financial performance and growth prospects can be the key drivers of its share price.
According to technical analysts such as Motilal Oswal, Vodafone Idea’s stock has shown a long-term downtrend from September 2022 to January 2023.
The stock is now showing an uptrend trend in the stock and has broken the support at Rs. 6.90.
However, the stock is still trading below its 200-day moving average of 7.76, which seems to be a bearish signal. You can learn more about technical analysis tools by reading our article on the best technical analysis software in India.
Factors Affecting Vodafone Idea Share Price in 2025
#1. Tariff Hike Delay
Financial analysts have raised concerns over a potential delay in tariff hikes in the Indian telecom sector. The scheduled tariff hike for September 2023 may be postponed until the General Elections in 2024. This delay could have severe consequences for the debt-ridden Vodafone Idea, which is already facing challenges.
Vodafone Idea is in a tough spot, battling fierce competition from Jio and Airtel. While its rivals have already launched 5G services, Vodafone Idea is still struggling to secure funds for 5G infrastructure. Without tariff hikes, the company will find it difficult to keep up with the industry and retain subscribers, making fundraising even harder.
Analysts predict a potential cash shortfall of around Rs 55 Bn in the next 12 months, exacerbating the company’s financial troubles. Consequently, Vodafone Idea’s shares declined, falling below Rs 7.
This situation calls for urgent attention from Vodafone Idea’s management and regulatory authorities. Delaying tariff hikes puts the company’s operations at risk, including the possibility of shop closures. Resolving fundraising challenges is crucial for the company’s growth and stability.
Investors and stakeholders closely monitor these developments, eager for clarity on tariff hike timelines and the company’s efforts to secure funds. The outcome will shape Vodafone Idea’s future and its ability to thrive in the competitive telecom landscape.
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#2. Fundraising Struggle
Despite prolonged efforts, Vodafone Idea has struggled to secure funds. The company initially cited the government’s delay in converting dues to equity as the reason for the setback.
However, it has now been almost two months since the equity conversion took place, and there has been no progress in fundraising.
Notably, the Aditya Birla Group (ABG), one of the telco’s promoters, had pledged to bring in new investments after the government approved the equity conversion.
The continued delay in raising funds has adversely affected Vodafone Idea’s 5G plans for 2023 and has resulted in a decline in the customer base. This has added pressure to the company’s near-term prospects, contributing to a downward trajectory of the stock which may also affect future performance of the stock.
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Comparison with Competitors in the Telecom Sector
Vodafone Idea operates in a highly competitive industry, with many well-established players such as Reliance Jio, and Airtel. Vodafone Idea is the 3rd top telecommunication operator in India with a 27% market share (reduced from 40%) in the telecom market in India.
In terms of the price-to-earnings (P/E) ratio, Vodafone Idea’s current ratio is 0, which is lower than the other peers. This suggests that the company’s shares are not making money.
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Vodafone Idea had a difficult time since 2018. Based on current trends and factors such as government policies, and company-specific developments, we estimate that the target price of Vodafone Idea shares by 2025 could be around Rs 9-10 per share.
You should be mindful of the risks associated with investing in the stock market and do your research before making any investment decisions.
You can also read about other stocks’ target prices –
- Tata Power Share Price Target
- IRCTC Share Price Target
- Adani Power Shares Target Price
- Yes Bank Share Price Target
To track Vodafone Idea’s share price target, you can regularly monitor financial news platforms, subscribe to credible investment newsletters, and keep an eye on the company’s official announcements and filings. Additionally, financial analysis websites and brokerage platforms offer real-time stock price tracking and historical data to help you stay informed.
TTML’s historical share price performance has been in downtrend since 2019 which is influenced by various factors such as Reliance Jio’s market disruption, regulatory issues, company performance, and industry dynamics.
Vi’s growth prospects in the near future are influenced by a range of factors. The telecom industry is experiencing rapid technological advancements and increased demand for data services.
Comparing Vi’s share price to its competitors allows us to assess its relative performance. You should analyze various financial metrics, such as market capitalization, price-to-earnings ratio, and revenue growth, to evaluate TTML’s position in the market and make informed investment decisions.
Regulatory changes can have a significant impact on Vodafone Idea’s share price. The telecom industry is subject to regulations related to licensing, spectrum allocation, pricing, and competition. Changes in these regulations can affect Vi’s operations, profitability, and market share.
The telecom industry is at the forefront of technological advancements, and Vi’s share price can be influenced by emerging technologies. For example, the rollout of 5G networks and cloud services can affect Vi’s future performance.
Investing in Vodafone Idea carries certain risks. Some of the key risks include intense competition in the telecommunications industry, regulatory uncertainties, technological disruptions, and the company’s financial performance. You should conduct thorough research and assess your risk appetite before making any investment decisions.
To analyze Vodafone Idea’s financial performance, you can start by reviewing the company’s financial statements, including the income statement, balance sheet, and cash flow statement. Look for trends in revenue growth, profitability margins, and cash flow generation over the past few years.
Additionally, analyzing key financial ratios can provide a deeper understanding of Vodafone Idea’s financial health. Ratios such as the debt-to-equity ratio, current ratio, and return on equity (ROE) can shed light on the company’s leverage, liquidity, and profitability. Comparing these ratios with industry peers can provide valuable insights into Vodafone Idea’s relative performance.
It’s also important to examine any recent financial developments or strategic initiatives undertaken by Vodafone Idea. Look for any major investments, cost-cutting measures, or debt restructuring that may impact the company’s financial position and, subsequently, the share price target.
When forecasting the share price target for Vodafone Idea, several key factors should be considered:
- Financial Performance: Assess the company’s historical financial performance and future growth prospects. Look for trends in revenue growth, earnings growth, and cash flow generation. Consider factors such as profitability, debt levels, and dividend payouts.
- Industry and Market Analysis: Analyze the competitive landscape and industry trends. Consider factors such as market share, pricing dynamics, technological advancements, and regulatory changes. Assess how Vodafone Idea positions itself within the industry and its ability to adapt to changing market conditions.
- Macroeconomic Factors: Consider macroeconomic factors such as GDP growth, interest rates, and inflation. These factors can have a significant impact on the overall market sentiment and investor appetite for stocks.
- Risk Factors: Evaluate the potential risks associated with investing in Vodafone Idea. These may include regulatory risks, competitive risks, technological disruptions, and financial risks. Assess the company’s ability to mitigate these risks and navigate challenges.
- Expert Opinions and Forecasts: Consider expert opinions and forecasts from reputable sources. Analyst reports, market research firms, and financial institutions often provide insights into the potential share price target for a company like Vodafone Idea.
The price-to-earnings (P/E) ratio of Vodafone Idea is 7.26.
Vodafone Idea hasn’t paid any dividends after 2016.
The answer to whether Vodafone Idea is a good investment opportunity for long-term investors depends on various factors, including the individual’s investment objectives, risk appetite, and current market conditions. It is advisable to consult a financial advisor before making any investment decision.