Summary:
Vodafone Idea shares fell nearly 3% after Q2FY27 net loss widened to ₹5,975 crore from ₹5,524 crore a year earlier. Despite revenue growth, higher ARPU and subscriber additions, exceptional losses and declining EBITDA margins weighed on investor sentiment.
Shares of Vodafone Idea (NSE: IDEA, BSE: 532822) came under selling pressure after the telecom operator reported a wider consolidated net loss of ₹5,975 crore for Q2FY27.
The company’s revenue and average revenue per user were better in the September quarter. However, its overall earnings performance was dragged down by extraordinary items and continuing financial losses.
Vodafone Idea shares drop 3%: Here’s the reason
Shares of Vodafone Idea dropped almost 3% after the latest quarterly numbers highlighted the challenges facing the debt-laden telecom operator.
The consolidated net loss increased to ₹5,975 crore in Q2FY27 compared to ₹5,524 crore in Q2FY26.
The loss increased sharply sequentially from ₹3,754 crore in Q1FY27.
A key driver was a phenomenal loss of ₹462 crore recorded in the September quarter.
This adjustment related to the re-measurement of fair value of equity shares of Vodafone Plc in connection with a settlement arrangement of 2018.
In comparison, the company had reported a massive profit of ₹1,611 crore in the quarter ended June 30, 2022.
The difference between these exceptional items made a significant contribution to the sequential deterioration of reported profitability.
Q2FY27 Financial Results
Vodafone Idea reported higher revenue but a wider loss.
Revenue from operations grew 6.2% YoY to ₹11,884 crore from ₹11,195 crore.
Revenue grew around 1.7% sequentially to ₹11,689 crore in Q1FY27.
However, EBITDA declined 1.1% QoQ to Rs 4,981 crore from Rs 5,034 crore.
The EBITDA margin dropped to 41.9%, compared with 43.1% in the prior quarter.
| Particulars | Q2FY27 | Q1FY27 |
| Revenue | ₹11,884 cr | ₹11,689 cr |
| EBITDA | 4,981 crore | 5,034 crore |
| EBITDA margin | 41.9% | 43.1% |
| Net loss | ₹5,975 cr | ₹3,754 cr |
| Exceptional item | -462 cr | +1,611 cr |
The results show that the revenue growth has not yet translated into a sustained reduction in reported losses.
Subscriber Base Improves; ARPU Rises To ₹198
One positive development during the quarter was improvement in average revenue per user, or ARPU.
Vodafone Idea reported ARPU of ₹198, up about 9.7% YoY.
ARPU is an important indicator of revenue per subscriber and is affected by tariff plans, customer spending and the proportion of prepaid to postpaid customers.
The subscriber base of the company stood at around 19.44 crore.
It also posted its first net additions in subscribers over a six-month period since the 2018 merger of Vodafone India and Idea Cellular.
The number of postpaid subscribers went up to about 3.39 crore, the highest in nine quarters.
The above developments suggest progress in terms of customer retention and monetising services.
Network expansion & financial difficulties
Vodafone Idea is also investing in its 4G and 5G network infrastructure to improve coverage and service quality.
Further funding was raised by the company in H1FY27, with total fundraising in the period touching around ₹10,500 crore.
The money will be used for network expansion, equipment purchases and operational needs.
The telecom business is still capital intensive, though.
There is a need for significant investment in network modernisation, spectrum obligations and maintaining service quality.
Subscriber retention and pricing is also impacted by competition from Reliance Jio and Bharti Airtel.
Vodafone Idea’s latest quarter is a mixed bag. Revenue, ARPU and subscribers gained, but exceptional charges and ongoing losses are big financial concerns.
Operating cash flows, tariff realisation, network investment and financial commitments will drive future performance.
