Vodafone Idea Posts Surprise ₹51,970-Crore Profit in Q4, Despite Share Price Decline

Vodafone Idea Posts Surprise Profit, But Stock Falls 4%

On Monday, 18 May, Vodafone Idea's stock declined by almost 4% in intraday deals despite the company posting a surprise profit of ₹51,970 crore in the January-March quarter of fiscal 2025-26 (FY26). The company's share price opened at ₹12.81, lower than the previous closing price of ₹12.96, and dropped to an intraday low of ₹12.45, representing a 3.93% decline.

Vodafone Idea had announced its Q4 results on Saturday, along with plans for fundraising involving equity infusion by its promoter, the Aditya Birla Group. The company's consolidated net profit of ₹51,970 crore marked the first profit in about six years, primarily due to relief in statutory liabilities. In contrast, the company had reported a net loss of ₹7,167 crore in the same period a year ago.

However, the company's operational metrics revealed a loss of around ₹5,515 crore during the reported quarter and ₹24,059 crore for the fiscal year 2026 before exceptional items comprising relief on adjusted gross revenue (AGR). The company's average revenue per user (ARPU) rose to ₹190 from ₹175 a year earlier.

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The company also announced plans to raise ₹4,730 crore through fully convertible warrants to equity shares at an exercise price of ₹11/warrant. This development comes after the Indian government capped Vodafone Idea's AGR dues at $13.79 million annually for the next six years, easing near-term cash flow pressure for the firm.

Despite the profit, the stock remained on a weak footing as analysts pointed out the underlying operating losses and possible equity dilution going ahead. The company's decision to raise ₹4,730 crore via convertible warrants has added pressure, signaling fresh dilution. Analysts believe that investors are focusing on the reality of the situation rather than the headline profit.

Brokerage JM Financial has raised its FY27–FY28 revenue/EBITDA estimates by 1–3%, accounting for slightly higher ARPU and reduced net subs loss in Q4FY26. The firm has also revised Vodafone Idea's stock price target to ₹14/share from ₹9/share, due to a reduction in debt by ~ ₹55,000 crore post AGR relief. It maintains an 'Add' rating on the counter.

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