There appears to be no mild on the finish of the tunnel for cash-strapped telecom providers supplier Vodafone Concept Ltd. Traders within the inventory ought to brace for extra disappointment, particularly after its subdued June quarter earnings.
In Q1FY22, Vodafone Concept’s subscribers declined by an enormous 12 million. This compares with a flat subscriber base of competitor Bharti Airtel Ltd and 14.4 million web additions for Reliance Jio. Consequently, its income slipped 4.7% sequentially to Rs9,200 crore. ARPU fell 2.8% sequentially to Rs104. ARPU is brief for common income per person. Analysts observe that ARPU was impacted by a fall in cell broadband subscribers and a decline in postpaid customers. ARPU must be additional impacted by slippages in recharge on lockdown, warning analysts.
Additionally, adjusted for one-time profit seen within the earlier quarter, its Q1FY22 annualized money Ebitda stood at Rs5,100 crore, which can fall brief considerably to satisfy the rising liabilities. Its web loss stood at Rs7,300 crore in Q1FY22.
Vodafone Concept’s money Ebitda exhibits quick deteriorating money move, whereas liabilities are rising. “We see excessive danger and large concern for VIL,” mentioned analysts at ICICI Securities Ltd.
On the finish of the June quarter, Vodafone Concept’s web debt stood at Rs1,90,700 crore. This consists of deferred spectrum legal responsibility of Rs1,06,000 crore, AGR legal responsibility of Rs62,200 crore, and financial institution borrowing of Rs23,400 crore.
The corporate additionally has a slew of liabilities due for funds corresponding to an annual fee in the direction of AGR legal responsibility of Rs9,000 crore in March 2022; financial institution assures of Rs14,300 crore arising for renewal, annual fee in the direction of the spectrum due in April 2022 and financial institution debt reimbursement by June 2022.
“We imagine present operation is unlikely to satisfy upcoming payouts, and danger of default can’t be dominated out, the much-anticipated tariff hike/s and capital infusion have been inadequate,” added the ICICI report.
In the meantime, the corporate has filed an evaluation petition within the Supreme Courtroom in the direction of AGR legal responsibility searching for a correction for the alleged arithmetical errors. It has additionally requested the DoT to offer a moratorium for the spectrum fee. Nonetheless, analysts say until the corporate raises extra funds or takes steep tariff hikes, its possibilities of survival are bleak.