Loss Narrows Sharply But Revenue Declines

    Revenue of India’s third largest telecom operator fell 1.19% over the previous three months to Rs 10,532 crore in the quarter ended March 31, 2023, according to an exchange filing on Thursday. That compares with the Rs 10,590-crore consensus estimate of analysts tracked by Bloomberg.

    Vodafone Idea Q4 Results: Key Highlights (QoQ)

    • Revenue down 1.19% at Rs 10,532 crore (Estimate: 10,590 crore)

    • Net loss at Rs 6,419 crore vs Rs 7,990 crore (Estimate: Rs 7,516 crore)

    • EBITDA up 0.70% to Rs 4,210 crore (Estimate: Rs 4,213 crore)

    • EBITDA margin at 39.97% vs 39.4% (Estimate: 39.6%)

    The company’s average revenue per user, or ARPU, in the March quarter stood at Rs 135—the same as in October-December. It improved 9.3% year-on-year.

    The annual revenue improved for the first time since the Vodafone-Idea Cellular merger in 2017, supported by tariff hikes, improving subscriber mix and 4G additions. In 2022-23, net loss widened to Rs 29,301 crore from Rs 28,245 crore in FY22, on the back of revenue that rose 9.50% to Rs 42,177 crore. The operational profitability improved by 24.1% to Rs 8,300 crore even as margin stood at 19.7%—the highest since the merger.

    Also, total gross debt dipped—from Rs 2,22,890 crore in Q3 FY23 to Rs 2,09,260 crore in Q4 FY23—as the government converted interest on its dues into equity for more than Rs 16,000 crore. Capital expenditure for the full fiscal stood at Rs 3,360 crore.

    The company continues to have a negative net worth of Rs 74,360 crore.

    Vodafone Idea had 225.9 million subscribers as on March 31, 2023. And while its active user base shrunk by 1.7 million to 207.9 million, the high-paying 4G user base grew by a million to 122.6 million. The blended churn stood at 3.8% in Q4 FY23 as against 4.4% in Q3 FY23.

    The January-March period was notable for Vodafone Idea, in the sense that the government, on Feb. 3, the interest accrued of the company’s dues—a move seen as a nudge to the beleaguered telecom operator to come up with a fundraising plan.

    While a State Bank of India-led consortium Vodafone Idea further, hopes of a fundraising rose after co-promoter Aditya Birla Group Chairman Kumar Mangalam Birla the company’s board as an additional director in April. Those hopes were dashed earlier this month when Vodafone Group Plc its investment in Vodafone Idea at nil, effectively indicating that the UK-based telecom operator has no interest in salvaging its joint venture in India.

    The company is also yet to launch its 5G operations, at a time when larger rivals Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd. are surging ahead.

    “We continue to remain engaged with our lenders for further debt fundraising as well as with other parties for equity or equity-linked fundraising, to make required investments for the network expansion, including 5G rollout,” Akshaya Moondra, chief executive at Vodafone Idea, was quoted as saying in the exchange filing.

    On Thursday, shares of Vodafone Idea Ltd. rose 0.43% to Rs 6.99 apiece on the BSE, even as the benchmark Sensex ended the day 0.16% higher at 61,872.62 points. The quarterly results were declared after market hours.

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