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Vodafone Idea Limited (Vi), India's third-largest telecom operator, announced its financial results for the second quarter of fiscal year 2025 (Q2FY25), revealing a continued path to profitability with a narrowed loss and revenue growth. The company recorded a net loss of Rs 7,176 crore for the quarter ending September 2024, a significant improvement compared to the Rs 8,738 crore loss reported in the same period last year.
Despite the narrowing of losses, Vi's performance on a sequential basis showed a widening of the deficit from Rs 6,432 crore in the preceding June quarter. This trend is likely attributed to continued investments in network infrastructure and ongoing competition within the Indian telecom market. However, the company's revenue from operations demonstrated a positive trend, increasing by 2% year-on-year (YoY) to Rs 10,932 crore. This growth was primarily driven by recent tariff hikes implemented by all private telecom operators in India.
Vi's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2FY25 improved to Rs 4,550 crore, compared to Rs 4,283 crore in the same quarter last year. This increase suggests that the company is effectively managing its operational expenses while navigating the competitive landscape. Notably, Cash EBITDA excluding Ind AS 116 impact reached Rs 2,320 crore, marking the highest level since the merger of Vodafone and Idea Cellular. This metric demonstrates the company's strong cash flow generation capability.
Vi's capital expenditure (Capex) for Q2FY25 amounted to Rs 1,360 crore, higher than the Rs 760 crore spent in the preceding quarter. This increase in Capex indicates Vi's commitment to enhancing its network infrastructure and expanding its 4G and 5G coverage. The company has projected a total Capex of Rs 8,000 crore for the second half of FY25, signaling a significant investment in its network development.
The company's debt from banks and financial institutions has decreased by Rs 4,580 crore during the past year, settling at Rs 3,250 crore. This reduction in debt reflects Vi's efforts to improve its financial stability and strengthen its balance sheet. Additionally, Vi's cash and bank balance stood at Rs 13,620 crore as of September 2024, providing a buffer for future operational and investment needs.
Despite the positive financial performance, Vi's subscriber base faced a slight decline in Q2FY25, primarily due to the recent tariff hikes. The 4G subscriber base stood at 125.9 million at the end of the quarter, a marginal decrease from 126.7 million in Q1FY25. However, the company observed an increase in its postpaid subscriber base, both on a quarter-on-quarter and year-on-year basis. While a significant portion of this growth stemmed from the machine-to-machine (M2M) segment, Vi also experienced a consistent rise in retail postpaid customers over the past year.
As of September 2024, Vi boasted a total subscriber base of 205 million, with 61% representing 4G/5G subscribers. The company's average revenue per user (ARPU) excluding M2M improved to Rs 166 during Q2FY25, a 7.8% increase from Rs 154 in Q1FY25. This positive trend in ARPU is attributed to the tariff hikes, which have led to increased customer spending on telecom services.
The financial results released by Vi indicate a positive trajectory for the company. Despite the challenges posed by the competitive Indian telecom market, Vi has managed to narrow its losses, increase revenue, and improve its financial position. The company's focus on network expansion and customer acquisition strategies, coupled with its recent tariff hikes, positions Vi for continued growth and profitability in the future.
Source: Vodafone Idea Q2 Results: Loss narrows YoY to Rs 7,176 crore; revenue up 2%