18 - 05 - 2026

Vodafone Idea’s net debt falls to ₹1.53 tn: Motilal Oswal

Vodafone Idea’s net debt fell by about ₹50,000 crore to ₹1.53 trillion, driven primarily by a major downward revision in its Adjusted Gross Revenue (AGR) obligations, Motilal Oswal Financial Services said in a report.

The telecom operator’s revised net debt position includes deferred spectrum dues of ₹1.27 trillion crore and external debt of ₹4,130 crore. The reduction follows a sharp correction in its estimated AGR obligations, which fell to ₹25,300 crore compared to an earlier ₹87,700 crore.

The firm received a capital boost as the Aditya Birla Group announced its intention to invest about ₹4,730 crore ($500 million) into the company through warrants priced at ₹11 per warrant over the next 18 months.

Analysts at Motilal Oswal noted that while this development is “sentimentally positive”, an “expedited debt raise remains critical for Vi to meet its INR 450 billion capex guidance over FY26-29”.

Exceptional Gains

A balance sheet reset resulted in Vodafone Idea reporting a net exceptional item of about ₹57,491 crore, pertaining to the one-time reset of AGR dues on an NPV basis. This accounting adjustment propelled the company’s headline reported net income for the fourth quarter of financial year 2026 to ₹51,970 crore, a sharp turnaround from a reported net loss of ₹5,286 crore in the preceding third quarter.

However, stripping out the impact of extraordinary items reveals continuing operational pressures. The company’s adjusted net quarterly losses came in at ₹5,521 crore, narrowing from a loss of ₹6,364 crore in the previous quarter, but missing broker expectations of a smaller ₹4,897.9 crore loss. This variance was primarily driven by higher-than-expected interest costs, which stood at ₹4,886 crore against a forecast of ₹4,218.2 crore.

Financially, Vodafone Idea’s fourth-quarter revenue remained stable quarter-on-quarter at ₹11,332 crore, a 2.9 per cent increase year-on-year. Reported Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) stood at ₹4,889 crore, up 1.5 per cent sequentially, with the corresponding EBITDA margin expanding by 60 basis points to 43.1 per cent.

For the financial year 2026, the operator recorded a total revenue of ₹44,800 crore, up 3 per cent year-on-year, while full-year reported EBITDA reached ₹19,000 crore. Annual capital expenditure was registered at ₹8,740 crore.

ARPU Inches Up

Operationally, Vodafone Idea’s key metrics showed modest signs of stabilisation, alongside persistent structural gaps relative to its larger industry peers. The operator’s blended Average Revenue Per User (ARPU) improved by 1.2 per cent quarter-on-quarter to ₹174, outperforming the flat-to-negative trends observed at competitors Reliance Jio and Bharti Airtel. When excluding Machine-to-Machine (M2M) connections, the core customer ARPU rose 2.1 per cent sequentially to ₹190, supported by an improving mix of premium subscribers.

The company’s overall subscriber base flattened out at 192.8 million as of March-end, a slowdown compared to the 3.8 million net declines suffered in the third quarter.

Monthly subscriber churn showed signs of moderation, down to 3.9 per cent from 4.4 per cent in the previous quarter, though it remains significantly higher than Bharti Airtel’s 2.4 per cent and Reliance Jio’s 1.7 per cent. The company’s premium postpaid segment, inclusive of M2M, grew by 1.3 million quarter-on-quarter to reach 30.1 million.

Network Expansion

Vodafone Idea expanded its 5G footprint to 83 cities across all 17 of its priority circles, up from 42 cities in December 2025. The company added roughly 3,400 towers and 18,000 net broadband sites during the final quarter, pushing its 4G population coverage to 86.3 per cent.

While Vodafone Idea’s average monthly data usage per subscriber rose to 19.7 GB from 18.7 GB in the prior quarter, it trails significantly behind Reliance Jio’s 42.3 GB (which includes fibre-to-the-home contributions) and Bharti Airtel’s 31.4 GB. Total voice traffic on the network remained flat, with an implied voice usage of 599 minutes per user per month, well below the 987 minutes and 1,150 minutes recorded by Reliance Jio and Bharti Airtel, respectively.

On the balance sheet side, the company managed to reduce its outstanding trade payables by ₹200 crore during the quarter to ₹8,800 crore, down from the ₹10,750 crore reported at the end of March 2025. Capital expenditure for the single quarter ticked up roughly 1.9 per cent sequentially to ₹2,290 crore.