Amid an existential struggle, Vodafone Idea on Monday said while its recent tariff tweaks were steps in the right direction, such changes were not enough to solve the industry’s structural issues, and tariff increases and floor pricing remained key to the sector’s revival.
Speaking during an earnings call, the firm’s CEO Ravinder Takkar said although Kumar Mangalam Birla had stepped down as chairman of Vodafone Idea, “he as well as Aditya Birla Group and the Vodafone group are committing to providing support and guidance to the company, in line with the stated positions of both the groups”.
The crisis-hit telco’s Q1 earnings announced on Saturday left analysts disappointed. A Goldman Sachs note cautioned that the company has large repayments due starting December, and at the current EBITDA (earnings before interest, taxes, depreciation, and amortisation) run-rate, Vodafone Idea could have a ₹23,800-crore cash shortfall until April 2022. The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30 stood at ₹1,91,590 crore.
ICICI Securities said it saw “high risk and huge concern for VIL” and in the wake of growing uncertainties, it has put VIL’s estimates, rating and target price under review until further clarity. The risk-reward is “unfavourable” given limited clarity on tariff hike and funding, BofA Securities said in its report.
