Motilal Oswal downgrades Vodafone Idea to ‘sell’, 40% downside potential in sight
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Citing a loss of market share, financial instability due to reliance on debt and dependence on government relief, domestic brokerage firm Motilal Oswal downgraded the Vodafone Idea (Vi) stock to a ‘sell’ from an earlier ‘neutral’ rating. The domestic brokerage firm also foresees a 40% potential downside in the stock as it has fixed a target price of Rs 5 for the same. Vi lost further market share to peers in the third quarter, with continued data subscriber churn and weaker customer engagement metrics. Bharti was once again the biggest gainer, with 80bp/45bp QoQ gains on Revenue Market Share (RMS) and Subscriber Market Share (SMS) in 3QFY25. “Vi continues to lose market share to peers on account of lower ARPU translation, given its inferior subscriber mix and elevated subscriber churn. Vi plans to embark on a significant capex cycle (INR500-550b over the next 2-3 years) to bridge the network gap with peers. Despite the likely capex, we be...