Vodafone Idea Q2 Preview: Firm to see moderate revenue growth; ARPU may rise 2-3% QoQ

Vodafone Idea is likely to post moderate revenue growth of around 0.5-1% (both YoY and QoQ) for the quarter ended September as a higher ARPU (average revenue per user) is offset by subscriber losses.

Net loss for the quarter is seen reducing marginally to around Rs 7,770 crore, compared with Rs 7,840 crore loss in the June quarter.

Analysts estimate the subscriber churn to continue into the second quarter with an overall user loss of 4.5 million, as against a 4.5 million subscriber loss in the previous quarter.

ARPU is pegged to grow around 2-3% for the July-September period.

Investors would watch out for the management commentary on the update on fund-raising, plans to increase network capacity, and the arrest subscriber decline.

Here's what analysts expect from Vodafone Idea Q2

JM Financial
We expect MBB subscriber addition to continue to be muted at 1 million. ARPU is expected to rise 2.0% QoQ to Rs 142 in 2QFY24 (vs. Rs 139 in 1QFY24). Hence, we expect reported EBITDA to be up only marginally QoQ at Rs 41.8 billion in 2QFY24.

Nuvama
We estimate moderate revenue growth of 0.9% QoQ, on 3% ARPU increase and 3 million subscriber decline. EBITDA margins to expand by 80bps QoQ.

Kotak Equities
We model EoP subscriber base to decline by 3.5 million QoQ to 217.9 million and ARPU to increase 2% QoQ to Rs 142/month on flow-through of minimum recharge plan hikes, subscriber mix improvements and higher days in Q2.

ICICI Securities
We expect VIL’s revenue to rise 0.4% QoQ to Rs 10,700 crore, despite sub losses, aided by ARPU growth on rise in penetration of unlimited plans in Q2FY24E. We expect EBITDA to improve 0.2% QoQ on operating leverage. Net loss is seen at Rs 7,770 crore (nil tax rebate).

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