Vodafone Idea Limited (VIL) released its performance results for Q1 FY25 on Monday. To check the full results, you can refer to the link below. Here, we will discuss the net debt of the company. Vodafone Idea's debt towards the government and banks rose in Q1 FY25. At the end of Q4 FY24, this was in a reducing trend. Debt rising for the company isn't too bad if it is at moderate levels in the short term. However, it is still something one should not overlook.
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Vi said, "total debt from banks and financial institutions stood at Rs. 46.5 billion and Optionally Convertible Debentures at Rs. 1.6 billion as of June 30, 2024."
To give you a comparison, the total debt of the telecom operator from banks and financial institutions at the end of Q4 FY24 was Rs 40.4 billion. So this has gone up by Rs 6.1 billion or rather Rs 610 crore. The government debt also shot up. At the end of Q4 FY24, the debt towards the government was Rs 2,034.3 billion. At the end of Q1 FY25, this became Rs 2,095.2 billion. The cash and bank balance stood at Rs 181.5 billion for Vi at the end of the June 2024 quarter.
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What was not good was a dip in overall revenues, even though it was a marginal reduction, it doesn't look good. The tariff hikes which happened at the start of the September 2024 quarter will help boost revenues from 4G subscribers. The telco's 4G subscriber base has to rise significantly in the coming months to garner a larger pie of the revenue market share.
Vi's lack of 5G could be one of the reasons why users are leaving the telco's networks. It would be interesting to see when Vi starts rolling out 5G commercially and if the debt goes up even further in the coming quarters.
