IDEA - Vodafone Idea

📊 NSE: IDEA 🏢 Telecommunications - Service Provider 📅 Last Updated: 12/14/2025 15:12

💰 Financial Performance

Revenue Growth by Segment

Revenue for Q2 FY26 was Rs. 111.9 billion, growing 2.4% YoY and 1.6% QoQ from Rs. 110.2 billion in Q1 FY26. Non-wireless sales grew sharply in Q2 FY26, though specific segment percentages were not disclosed.

Geographic Revenue Split

The company operates as a pan-India telecom service provider; however, a specific percentage split by region is not disclosed in the available documents.

Profitability Margins

Gross margins are not explicitly stated, but Operating Profit Margin (OPM) stood at 38% in Jun 2024. Net Profit remains negative, with a loss of Rs. 6,471 Cr reported in Jun 2024 (Standalone).

EBITDA Margin

Reported EBITDA for Q2 FY26 was Rs. 46.9 billion, up 3% YoY, with the margin improving 20 bps from 41.6% to 41.9%. Cash EBITDA margin improved 30 bps QoQ from 19.8% to 21.1% in Q2 FY26.

Capital Expenditure

The company initiated a new investment cycle in Q3 FY25. Historical fixed assets were valued at over Rs. 162,000 Cr as of Mar 2024. Planned capex is focused on 4G expansion and 5G rollout to arrest subscriber decline.

Credit Rating & Borrowing

CARE Ratings notes liquidity is stretched and dependent on GoI support. Debt from banks and financial institutions stood at Rs. 3,246 Cr as of September 30, 2024. Net finance cost for Q2 FY26 was Rs. 46.8 billion.

⚙️ Operational Drivers

Raw Materials

Primary operational inputs include Spectrum, Network Equipment, and IT Services, which are critical for maintaining the cellular network.

Import Sources

The company partners with global leaders for Network and IT equipment, typically sourced from international markets, though specific countries are not listed.

Key Suppliers

Key suppliers include Indus Towers, with whom the company had transactions worth Rs. 59,534 Mn in FY25 (up to Nov 18, 2024).

Capacity Expansion

Current focus is on 4G network expansion and the rollout of 5G services to stabilize and grow the subscriber base.

Raw Material Costs

Network operating costs increased in Q2 FY26 due to the investment cycle initiated in Q3 FY25. Total expenses for Jun 2024 were Rs. 6,404 Cr.

Manufacturing Efficiency

Efficiency is tracked via Cash EBITDA margin, which improved to 21.1% in Q2 FY26 due to cost optimization and network efficiency gains.

Logistics & Distribution

Distribution costs are not disclosed as a specific percentage of revenue for the telecom service model.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be driven by 4G network expansion and 5G rollout to arrest subscriber loss, alongside cost optimization and increasing ARPU (Average Revenue Per User) through network augmentation.

Products & Services

Telecom services including wireless voice and data (SIM cards), non-wireless sales, and enterprise IT services.

Brand Portfolio

Vi (Vodafone Idea).

New Products/Services

Rollout of 5G services is the primary new service launch expected to contribute to future revenue growth.

Market Expansion

Expansion is focused on strengthening 4G coverage and launching 5G in key circles to compete with other major telecom players.

Market Share & Ranking

The company is one of the three major private telecom operators in India, though it has faced a continuous decrease in subscriber base.

Strategic Alliances

Partnerships with global leaders in Network equipment and IT services; Indus Towers was a JV partner until Nov 2024.

🌍 External Factors

Industry Trends

The industry is shifting toward 5G technology. VIL is positioned to transition but faces a high debt-to-PBILDT ratio of 14.29x, which is significantly higher than competitors.

Competitive Landscape

Competes in a highly consolidated market against major players like Reliance Jio and Bharti Airtel.

Competitive Moat

The moat consists of extensive network infrastructure and spectrum holdings, but its sustainability is threatened by material uncertainty regarding going concern status.

Macro Economic Sensitivity

The business is sensitive to government support and regulatory decisions, particularly regarding the telecom sector's financial health.

Consumer Behavior

Shift toward higher data consumption is driving the need for 4G expansion and 5G readiness.

Geopolitical Risks

Dependency on global equipment suppliers makes the company vulnerable to trade barriers or technical failures in international supply chains.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by the Department of Telecommunications (DoT) and impacted by the Adjusted Gross Revenue (AGR) matter.

Environmental Compliance

The company maintains a CSR committee but had nil CSR obligation for FY25 due to negative average net profits over the last three years.

Taxation Policy Impact

The company has a 0% effective tax rate in recent quarters due to significant accumulated losses.

Legal Contingencies

The company faces a major contingency regarding the Supreme Court order on the AGR matter (Oct 2019). A GST penalty of Rs. 12,72,899 was also issued in Dec 2025.

⚠️ Risk Analysis

Key Uncertainties

Material uncertainty exists regarding the company's ability to continue as a going concern, dependent on DoT support for AGR and successful debt/equity fundraises.