Mumbai: Most brokerages have maintained a bearish view on Vodafone Idea<\/a> as the company posted a loss of Rs 6,985.1 crore for the March quarter and raised concerns over its viability.
Some have target prices that predict that the stock will be reduced to a third of the current value in the next year. CLSA and Credit Suisse<\/a> have maintained an underperform rating, JP Morgan has an underweight recommendation with a price target of Rs 3 and Goldman Sachs<\/a> has a sell with a price target of Rs 3. The stock plunged 8.8% to Rs 9.07 Thursday. It has fallen 19% so far this year.
Analysts said Vodafone Idea’s capital expenditure continues to lag that of peers, which is why the underperformance is likely to continue. “Vodafone Idea has large repayments due starting December 2021, and at the current Ebitda run-rate, we estimate the company could have a Rs 23,400 crore cash shortfall until April 2022,” said Goldman Sachs.
Mumbai: Most brokerages have maintained a bearish view on Vodafone Idea<\/a> as the company posted a loss of Rs 6,985.1 crore for the March quarter and raised concerns over its viability.
Some have target prices that predict that the stock will be reduced to a third of the current value in the next year. CLSA and Credit Suisse<\/a> have maintained an underperform rating, JP Morgan has an underweight recommendation with a price target of Rs 3 and Goldman Sachs<\/a> has a sell with a price target of Rs 3. The stock plunged 8.8% to Rs 9.07 Thursday. It has fallen 19% so far this year.
Analysts said Vodafone Idea’s capital expenditure continues to lag that of peers, which is why the underperformance is likely to continue. “Vodafone Idea has large repayments due starting December 2021, and at the current Ebitda run-rate, we estimate the company could have a Rs 23,400 crore cash shortfall until April 2022,” said Goldman Sachs.
CLSA’s view concurred with that of JP Morgan and Goldman Sachs. “...with $24 billion in debt, of which 88% is for spectrum and AGR (adjusted gross revenue), it is headed for a financial crisis when annual payments come due,” said CLSA.
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