Analyst Corner: Maintain ‘Buy’ on Vodafone Idea with a Target Price of Rs 37

In the analyst meet, Vodafone Idea management reiterated its network integration is on track with full impact of synergy benefits expected in 2 years (by Q1FY21).

It has maintained its capex guidance (`270 bn in 2 years) as it expects cash position to improve from equity infusion, asset monetisation, ARPU improvement and synergy benefits. It sees market share stabilising at 30% (for 3+1 player market) as it expects to gain market share in its traditionally strong circles. Also, it expects ARPU to improve as 4G revenue share improves gradually.

Funding concerns to be alleviated by (i) `250 bn capital raise; (ii) sale of fiber network; and (iii) tower stake sale.