‘Vodafone Idea may see further upside on likely ARPU growth’

Mumbai: CLSA sees a further upside in Vodafone Idea shares on likelihood of strong ARPU (average revenue per user) growth going ahead, resolution on adjusted gross revenue front and potential floor tariffs. The stock price has already doubled in the past one month.

“With the return of growth, led by tariff hikes, Vodafone Idea promoters may reassess incremental funding (promoters had contributed 72 per cent in the $3.5-billion rights issue of 2019), irrespective of the AGR case outcome. With the stock’s risk-reward still favourable, we reiterate buy,” said CLSA.

The brokerage has a buy rating on the stock with a target price of Rs 12. The stock jumped 6.4 per cent to 8.63 on Thursday after gaining 106 per cent in the last one month.

On the likelihood of ARPU growth, CLSA said Vodafone Idea’s mobile ARPU at Rs 109 has lagged Bharti Airtel by 19 per cent.