Vodafone Idea shares slump 29 per cent on Q1FY20 results

Shares of Vodafone Idea slumped massively after the company posted dismal Apr-Jun results. The Vodafone Idea shares opened at Rs 9 per share and fell to Rs 6.56 per share, 29 per cent down from the previous settlement. Today, on BSE, Vodafone Idea shares ended at Rs 6.77 per share, down 26.81 per cent from the last close. Vodafone Idea reported a consolidated net loss of Rs 4,873.90 crores for the first quarter of FY20. THe Apr-Jun financial results are not comparable with the same quarter of last year as the merger of Vodafone Group and Idea Cellular was completed in 2018 as the merger of Vodafone and Idea was completed in August 2018. 

Vodafone Idea’s revenue fell to Rs 11,269.20 crore in Apr-Jun as compared with Rs 11,775 crore in the Jan-Mar quarter of FY19. The company said its revenue declined by 4.34 per cent on a quarterly basis due to the churn of customers who recharged with service validity vouchers in Q4 as well as ARPU downtrading. It said its subscriber base shrank to 320 million from 334 million in the previous quarter. 

Vodafone Idea’s EBITDA rose to Rs 36.5 billion versus Rs 17.9 billion in Q4FY19 as the adoption of Ind AS 116 positively benefited EBITDA. On an underlying basis, the impact of lower revenues was partially offset by further cost synergy realisation, with Q1FY20 underlying operating expenses lower by Rs 14.8 billion compared to Apr-Jun of FY19. During the Apr-Jun quarter the company also added 4.1 million 4G customers, taking the overall 4G subscriber base to 84.8 million. 

The merger of Bharti Infratel and Indus Towers is likely to conclude by H1FY20. Vodafone Ideas 11.15 per cent stake in Indus has an implied value of Rs 56.3 billion which the company plans to monetise on completion. It is also exploring options to monetize over 1,59,000 kilometres of intra-city and inter-city fibre which will provide further financial flexibility.  

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