Busines Times

Vodafone Idea Jumps 9% After Q1 Results – Big Rally Driven by ARPU Growth & Lower Losses

Navnath S Galve

Vodafone Idea (Vi), India’s struggling telecom operator, witnessed a sharp rally in its stock price after declaring its Q1 FY26 earnings, giving investors a glimpse of revival signs despite persistent financial pressure. The share price jumped nearly 9% in intraday trade, hitting a high of ₹6.69 on the NSE, driven by encouraging improvements in average revenue per user (ARPU), slower customer losses, and revenue growth.

Vodafone Idea

While challenges remain—particularly widening losses and heavy debt—the results signal that Vodafone Idea is working to stabilize its operations in a hyper-competitive telecom market dominated by Reliance Jio and Bharti Airtel.

Vodafone Idea’s Q1 FY26 Highlights

1. ARPU Growth: A Key Positive

One of the most important metrics for telecom companies is ARPU, as it directly reflects the profitability of their subscriber base. For Vodafone Idea, ARPU jumped 15% YoY to ₹177, compared to ₹154 in the same quarter last year.

This growth was driven by tariff hikes, an increase in premium customers, and higher data consumption per user. Notably, ARPU improvement aligns Vodafone Idea closer to its rivals Airtel and Jio, though it still trails slightly.

Industry experts believe ARPU will continue to rise across the sector as tariff hikes are expected in the coming quarters, particularly after the conclusion of the general elections, when operators usually adjust rates.

2. Slowing Subscriber Losses: A Relief for Investors

For several quarters, Vodafone Idea has been bleeding customers to Reliance Jio and Airtel due to weaker 4G coverage and delayed 5G rollout. However, in Q1 FY26, the company managed to restrict subscriber losses to just 5 lakh, compared to an alarming 50 lakh per quarter previously.

This slowdown signals that Vi may have reached a level of customer stabilization. A large part of this improvement is attributed to focused efforts in key telecom circles, better customer retention strategies, and targeted marketing campaigns.

Although the total subscriber base has fallen to 19.77 crore, the pace of decline narrowing gives a positive signal that Vodafone Idea is trying to hold onto its loyal customers.

3. Revenue Recovery Despite Losses

Revenue for the quarter came in at ₹11,022 crore, a 4.89% YoY growth compared to ₹10,508 crore in Q1 FY25. This growth is particularly significant given the competitive landscape and Vodafone Idea’s financial stress.

The revenue uptick highlights that despite losing subscribers, the higher ARPU and strong enterprise business growth helped lift topline numbers.

However, net loss widened by 2.74% YoY, touching ₹6,608 crore, as financing costs and operational expenses continued to weigh on the balance sheet.

EBITDA Margins Improve

On a positive note, Vodafone Idea reported an improvement in EBITDA margins, rising to 41.8% in Q1 FY26 compared to 40% in Q1 FY25. This suggests better cost control and efficiency measures being implemented by the management.

Improved margins indicate that once the company manages to address its funding and debt challenges, operationally it has the potential to sustain profitability.

Vodafone Idea’s Past Quarter Performance (Q4 FY25)

In the previous quarter (Q4 FY25), Vodafone Idea had reported:

This consistent ARPU growth has now become the backbone of Vodafone Idea’s turnaround story, despite the massive losses.

Stock Market Reaction: Short-Term Surge, Long-Term Pain

Following the Q1 FY26 earnings, Vodafone Idea’s stock rallied 9% intraday, signaling investor relief over operational improvements. However, the stock remains under heavy pressure over the long term:

This sharp decline in long-term performance shows that despite short-term rallies, investors remain concerned about Vodafone Idea’s debt load (over ₹2 lakh crore), delayed fundraising, and inability to expand aggressively in the 5G space.

Challenges Ahead for Vodafone Idea

Despite positive signs, several challenges remain:

  1. High Debt Burden – With debt exceeding ₹2 lakh crore, repayment remains a massive hurdle.
  2. Delayed 5G Rollout – Jio and Airtel are already rolling out 5G services across major cities, while Vi struggles with funding.
  3. Funding Uncertainty – Fundraising plans have been announced multiple times but execution remains slow, creating uncertainty among investors.
  4. Customer Retention – Even though losses slowed, Vi still needs to aggressively improve network quality to retain and attract customers.

Analyst Views

Market analysts have mixed opinions on Vodafone Idea’s outlook. Some see the ARPU growth and improved margins as a sign of gradual recovery, while others remain skeptical due to the mounting debt and lack of fresh capital infusion.

Vodafone Idea’s Q1 FY26 results have provided some much-needed positive signals to investors. Improved ARPU, slower subscriber losses, and revenue growth are clear steps in the right direction. However, widening losses, weak long-term stock performance, and unresolved funding issues continue to weigh heavily.

For now, the 9% stock rally reflects short-term optimism, but long-term recovery will depend on capital infusion, debt restructuring, and faster network upgrades.

As the telecom industry prepares for the next wave of growth led by 5G, enterprise solutions, and digital services, Vodafone Idea must act swiftly to reclaim lost ground or risk being left behind.

Exit mobile version