Motilal Oswal Holds Neutral on Vodafone Idea, Rs 11 Target Unchanged
Overview
Motilal Oswal maintains a Neutral rating on Vodafone Idea with an unchanged target price of ₹11 per share. The brokerage firm acknowledges government relief on Adjusted Gross Revenue (AGR) dues, noting it aids debt reduction and capital expenditure plans. However, significant deferred spectrum liabilities and competitive pressures remain key challenges for the telco's market share recovery.
Stocks Mentioned
Analyst Reiterates Neutral Stance on Vodafone Idea
Motilal Oswal has reiterated its Neutral rating on Vodafone Idea (Vi), keeping the target price unchanged at ₹11 per share in a research report dated January 09, 2026. The brokerage firm highlighted government relief measures as a significant positive for the telecom operator, particularly the reduction in Adjusted Gross Revenue (AGR) dues.
AGR Dues Relief and Debt
The relief measures are seen as a strong signal of the Indian government's commitment to a stable three-player telecom market. Motilal Oswal estimates the net present value (NPV) of AGR dues for Vodafone Idea has been cut by approximately 73% to ₹240 billion. This is expected to facilitate the company's long-awaited debt raise and support increased capital expenditure in the medium term.
Spectrum Liabilities and Market Share Challenges
Despite the positive outlook on AGR dues, substantial hurdles remain. Vodafone Idea still owes approximately ₹1.23 trillion to the government for deferred spectrum liabilities. Large annual repayments are scheduled from FY27 onwards, and securing similar relief on these obligations, such as interest waivers or deadline extensions, is anticipated to be challenging. Furthermore, even with potential capex increases, regaining or retaining market share will be a formidable task. Competitors reportedly offer superior services and possess stronger free cash flow generation capabilities, posing a significant competitive threat. The valuation of 14x FY28 reported EV/EBITDA, which implies a 22x FY28 pre-INDAS EV/EBITDA, is viewed as a premium compared to larger peers.
