Nomura India Raises Target Price for Vodafone Idea Ltd

Nomura India has significantly increased its target price for Vodafone Idea Ltd by 131% to ₹15 per share from the previous ₹6.50. 

The brokerage has also upgraded the stock rating to ‘Neutral’ from ‘Reduce,’ reflecting a more optimistic outlook based on the company’s recent performance.

Vodafone Idea Q4 Results and Performance Indicators:

Vodafone Idea’s Q4 results met expectations, showcasing a slowing pace of subscriber loss and a modest increase in average revenue per user (ARPU). These results contributed to Nomura’s positive reassessment.

Nomura India Industry Outlook and Valuation:

Nomura India notes that the outlook for the telecom industry has improved significantly. The industry appears to be moving towards a more stable environment with three major private players and a consensus on the need for ARPU hikes. 

This improved industry alignment has influenced Nomura’s decision to roll forward its valuation to March 2026, applying an EV/Ebitda multiple of 15 times.

Vodafone Idea Financial Projections and Tariff Hike Expectations:

The brokerage has adjusted its financial projections, trimming the FY25 EBITDA estimates by 2% while raising FY26 EBITDA estimates by 6%. 

Nomura also highlighted the potential positive impact of Vodafone Idea’s anticipated fund-raising efforts, which are expected to significantly improve the company’s financial outlook.

Nomura expects a substantial tariff hike of 15% post-election, a crucial trigger for the stock. This anticipated tariff adjustment will benefit the telecom sector, including Vodafone Idea.

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