Vodafone Idea stock jumps 6% as record ARPU growth narrows losses

Vodafone Idea shares gained as much as 6% in morning trade on Wednesday, extending a four-session winning streak that has pushed the stock up more than 8%. The telecom operator has now rallied 108% over the past year and is up 16% year-to-date, defying broader weakness in the Indian market.

The sustained buying follows the company's April-June quarterly results, reported on August 10, which showcased its highest industry ARPU growth. Average revenue per user rose 10.2% year-over-year to ₹195. This pricing power helped drive consolidated revenue up 2.4% to ₹11,689 crore, while EBITDA climbed to ₹5,034 crore and margins expanded to 43.1% from 41.8%.

The stronger operational performance narrowed the net loss to ₹3,754 crore, down significantly from ₹6,608 crore in the same period last year. Despite the share price momentum, major brokerages have largely maintained their existing positions, signaling caution about the company's structural challenges.

JM Financial kept its "add" rating but reduced its target price to ₹14.7 from ₹15. The firm trimmed its revenue, EBITDA, and profit estimates for fiscal years 2027 through 2029 by 1% to 4%, explicitly factoring in a potential delay in tariff hikes that the market had previously priced in.

Motilal Oswal Financial Services retained a "neutral" stance with a target price of ₹11, derived from a discounted cash flow model backed by 14.3 times September 2028 estimated EV/EBITDA. While the brokerage raised its revenue estimates for the next two years by 1% to 3% to account for higher ARPU assumptions, it warned that a full turnaround is far from guaranteed.

"We believe Vodafone Idea’s revival hinges on: (1) sustained tariff hikes or change in tariff construct, (2) stabilisation of consumer wireless subs trends, (3) more rational competition on subscriber acquisition, and (4) continuation of benign regulatory regime, with requirement of further relief on spectrum dues," Motilal Oswal said.