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Vodafone Idea share price jumps over 3% as Q4FY22 losses narrow; what should you do with this telecom stock?

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Vodafone Idea share price soared over 3.3 per cent to Rs 9.03 apiece on BSE after the telecom company reported narrowing of its consolidated losses.

Vodafone Idea share price soared over 3.3 per cent to Rs 9.03 apiece on BSE after the telecom company reported narrowing of its consolidated losses to Rs 6,563.1 crore for the fourth quarter of FY22, compared to the same period of the previous year. The stock had hit a 52-week high of Rs 16.79 apiece last year in December, however, since then stock has been mapping downward trajectory.

Analysts said that even though Vodafone Idea’s losses have reduced along with improving ARPU, fundamentally Bharti Airtel and Reliance Industries are much better long term buys as markets approach newer lows. “Technically, 9.2 remains a strong resistance. Traders should initiate buy only above 9.2 for short term targets of 11-12.8,” Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told Financial Express Online.

In the trade volume terms, a total of 1.18 crore shares exchanged hands on BSE, while 5.18 crore stocks traded on the National Stock Exchange (NSE), so far in the day. Analysts at Motilal Oswal Financial Services were neutral on this telecom stock. Vodafone Idea received Rs 74 billion in the last two years. Out of this, Rs 15 billion was infused from Vodafone PLC towards contingent liability payment. “This is not an equity infusion but a liability compensation and so there is no incremental stake,” Motilal Oswal Financial Services said.

Those at ICICI Direct said while government relief (option of conversion of dues into equity) ensures survival, the company needs to raise capital as early as possible to stay competitive. “Subscriber churn also needs to be controlled, while the network spends lags vis-à-vis peers. We seek management commentary on fund raising,” they added.

Akhilesh Jat, analyst at CapitalVia Global Research, advised investors to avoid this telecom stock as it formed Lower-Low and Lower-High formation, falling more than 25 per cent in the past one month.

The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

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