Vodafone Idea (Vi), the third-largest telecom operator in the country, has been a pain for investors over the last five years, dropping by 83% in value/price. ICICI Securities has kept the company's stock under review and said that it could only give a final rating on the stock once clarity emerges on the fundraising and the growth path ahead. But, at the same time, ICICI Securities has listed out the key triggers for the stock.
Vodafone Idea Stock Key Triggers
Vodafone Idea is yet to raise capital from any external source. To meet the capital spends for expanding the 5G network, launching 5G, and staying competitive, Vi needs substantial fundraising, and that is one of the key triggers. Further, Vi needs to bring an improvement in subscriber churn rate and also improve 4G subscriber metrics.
These are the key triggers for Vi's stock listed by ICICI Securities. Because of a lack of access to significant funds, Vi isn't able to compete at par with Airtel and Jio in many areas. The telco's ARPU (average revenue per user) figure stands at Rs 128 (Q1 FY23). While the telco's overall revenues grew, the margins reduced QoQ. VIL is soon going to go for another tariff hike which will most likely come at around the end of the year. It will be interesting to see how the customers of the telco will react to it and what will the subscriber churn rate look like.
For now, ICICI Securities has given an alternate stock idea of Bharti Airtel for the telecom sector.
Vi Alternate is Airtel
The analyst said that besides VIL, Bharti Airtel is a company that it likes. ICICI Securities has recommended a 'Buy' rating for Airtel with a target price of Rs 860. This is on account of the superior metrics that Airtel enjoys over Vi.
