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Vodafone Strategy shares fall 5% on weak Q4 earnings

Shares of Vodafone Notion declined as considerably as 4.90% on Wednesday after the organization reported a consolidated web loss of ₹11,643.50 crore in Q4FY20, virtually a few occasions larger than net loss of ₹4,881.90 crore in the fourth quarter of FY19.

At 2:45 pm, Vodafone Concept was trading at ₹10.22 down nearly 4% from its former close, whilst the benchmark index, Sensex sophisticated 1.4% to 35,395.35 factors.
Telecom operator’s consolidated revenue from functions fell .17% to ₹11,754.20 crore in Q4 FY20 vs . ₹11,775 crore in Q4 FY19. Pre-tax loss stood at ₹11,742.60 crore in period of time less than assessment in opposition to ₹6,758.90 crore in Q4 FY19.
Vodafone Idea’s subscriber base declined to 291 million in the fourth quarter ending 31 March from 304 million in Q3FY20. Subscriber churn remained stable in Q4 FY20 at 3.3%. Company’s normal revenue for each user (ARPU) for Q4 enhanced to ₹121, a ₹12 appreciation from ₹109 in Q3FY20, pushed by the prepaid tariff hike helpful from December 2019.
According to analysts at Angel Broking, “ARPU for March quarter improved to Rs.121 in opposition to Rs.109 in December quarter, due to pay as you go tariff hike powerful from Dec’19. Vodafone Idea’s potential to carry on as a going concern is highly dependent on a beneficial outcome on AGR matter ahead of the Supreme Courtroom for the payment in installments. A favourable ruling, advancement in ARPU, reduction in loss of market share and any significant investment by a significant tech investor will be the key triggers for upside in the inventory.”
On the modified gross revenue (AGR) make any difference, the division of telecommunications (DoT) has proposed to stagger the payment of ₹58,254 crore dues over 20 decades. Nevertheless, Vodafone Idea promises that ₹45,960 crore AGR dues are pending. The business wants a 20-year timeframe to shell out these dues, that it statements now stand at ₹39,106 crore after it paid ₹6,854 crore in the course of the March quarter. The Supreme Courtroom will hear the subject next in the 3rd week of July.
Analysts at Motilal Oswal in final result assessment stated “Vodafone Idea’s weak cash position with fantastic cash and equivalents of ₹2,660 crore in FY2020E and would be inadequate to service approximated cash necessity of ₹13,500 crore in FY2021/2022. It wants 50% huge price hike to crank out potential EBITDA of ₹25,000 crore to garner sustainable cash flows”. The brokerage has a beneath review on the inventory, right until a clarity on the company’s enterprise continuity.
Commenting on the Q4 overall performance, Ravinder Takkar, the taking care of director (MD) and chief govt officer (CEO) of Vodafone Idea, has mentioned that: “Our concentration on fast community integration, as perfectly as 4G coverage and capacity growth, has even more enhanced customer experience. On the AGR make a difference, the subsequent listening to is scheduled with the Honorable Supreme Courtroom in the third 7 days of July”.

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