Vodafone Idea’s Q2 performance misses expectations
Vodafone Idea Ltd, India’s third-largest telecom operator, on Thursday reported a weaker-than-expected earnings performance in the September quarter.
The Mumbai-headquartered company’s net loss expanded to ₹5,975 crore from ₹5,562 crore a year ago, missing Bloomberg’s estimate of ₹5,263 crore. In the June quarter, the company reported a net loss of ₹3,754 crore on higher expenses and low revenue growth.
The losses widened in the quarter owing to an exceptional loss of ₹462 crore, compared with a ₹1,816 crore gain in the previous quarter from the fair-value adjustment of equity shares to be settled with the promoter entity, Vodafone Plc.
As of September-end, the fair market value of such earmarked shares stands at ₹3,972 crore, which can be sold later, and the proceeds will come to Vodafone Idea as part of the settlement, according to the company’s statement.
Revenue from operations in Q2 FY27 rose 6.15% year-on-year and 1.6% quarter-on-quarter to ₹11,884 crore, also missing Bloomberg’s estimate of ₹11,906 crore. Subscriber additions and an increase in user spending supported its revenue growth during the quarter.
The company’s quarterly Ebitda (earnings before interest, tax, depreciation and amortization) grew 6.3% on-year to ₹4,981 crore.
“Our Q2FY27 performance reflects steady progress against our priorities. We are encouraged by the continued improvement in our net subscriber additions, supported by our network expansion and enhanced customer experience,” Abhijit Kishore, chief executive of Vodafone Idea, said in a statement.
“We have placed capex orders of over ₹13,200 crore, of which nearly ₹6,000 crore capex has been executed. Encouraged by our progress in discussions to raise funding, we are confident to place additional orders and sustain the momentum in our network expansion.”
In its statement, the company said it secured total funding of over ₹10,500 crore through the first half of the current fiscal year, including warrants and fund- and non-fund-based facilities. It said over ₹4,000 crore of incremental bank funding was arranged in the second quarter.
The telecom operator declared the results after market hours. On Thursday, its shares closed 0.7% higher at ₹12.97 on the National Stock Exchange, while the Nifty 50 ended 0.2% higher.
Its weak earnings come as rivals Reliance Jio and Bharti Airtel report strong performances. Jio leads the subscriber market with 542.4 million users, followed by Airtel India with 498.7 million.
Vodafone Idea is also looking to tie up a bank debt of ₹35,000 crore. The timeline of the debt fundraise is crucial, given its ₹45,000-crore network expansion plan and its yearly spectrum repayments over the next few years.
During the quarter, Vodafone Idea net added 1.3 million subscribers, taking its base to 194.4 million. However, on a year-on-year basis, the subscriber base fell by 2.3 million from 196.7 million.
In postpaid, the company added 2 million users, taking the total base to 33.9 million.
In the preceding quarter, Vodafone Idea marked its first quarterly net subscriber addition since the merger of Vodafone India and Idea Cellular in August 2018.
In comparison, Bharti Airtel was only able to net add 716,000 mobile subscribers during the quarter, as the removal of the ₹299 entry-level plan increased user churn for the company. The telecom operator brought back the recharge plan last week, as its peers, Reliance Jio and Vodafone Idea, did not follow suit. Jio net added 9.1 million total subscribers during the quarter.
Vodafone Idea’s blended average revenue per user (Arpu) grew 0.6% sequentially to ₹178 a month, from ₹177 in the June quarter. Its customer Arpu, excluding machine-to-machine (M2M) users, was at ₹198, up from ₹195 in the previous quarter, supported by network upgrades, 2G to 4G/5G migration, and an extra billing day during the quarter.
Arpu is a key metric of monthly revenue earned from each mobile customer.
Airtel’s Arpu, rose 2.7% sequentially and 6% from a year ago to ₹271 in the September quarter, while that of Jio rose 1.5% sequentially and 3.5% on-year to ₹218.8 a month.
On Friday, shareholders will track Vodafone Idea’s management commentary on its ongoing capex activity and further fundraising programme.
Jatin is based in New Delhi and writes on telecom and technology with a keen interest in policy and regulation. With over five years of reporting experience across Informist Media, Financial Express and now Mint, he has extensively covered the telecom, information technology, electronics and semiconductor sectors.<br><br>A commerce graduate, Jatin's work focuses on tracking industry developments, regulatory changes and policy decisions that shape India’s evolving digital ecosystem. Over the years, he has reported on key trends and shifts across these sectors, bringing clarity to complex policy and business issues.<br><br>Known for his strong news sense, Jatin focuses on breaking stories and delivering in-depth reporting that offers readers an understanding of complex topics, policy decisions and corporate developments. His work often examines the intersection of policy and business, highlighting how regulatory decisions impact industry strategy, pricing, and consumer outcomes.<br><br>He brings a strong domain understanding for Mint and his work is widely picked up by other media firms. With a focus on accuracy and depth, he aims to break down developments into clear, accessible insights for readers, while continuing to track emerging trends shaping the future of India’s telecom and technology sectors.
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