Vodafone Idea’s (VIL’s) Q4FY21 money Ebitda at Rs 22 bn benefited from one-off gains in network expense of Rs 4.5 bn adjusted money Ebitda came in beneath our estimate regardless of expense-saving efforts. Though VIL has seen marginal improvement in 4G subscriber (sub) addition and decrease total subs loss, it is also tiny to make any distinction, in our view. We see liabilities coming up for payment quickly and VIL may possibly have cashflow mismatch. The efforts to raise funds have also not yielded any outcome however. Relief from government on spectrum payment, and reduction in AGR liability on SC accepting reconciliation are other hopes. We have reduce our Ebitda estimates by 11%/14% for FY22e/FY23e, but maintained our target cost of Rs 5 as we boost the Ebitda various to 13.3x (from 10.5x earlier). SELL.
Key variables showed enhancing prints: VIL had sub loss of just 2 mn – identical as in the prior quarter. Company has added 4.2 mn 4G subs (it has been enhancing in previous couple of quarters). Gross sub addition has enhanced to 22 mn (vs 13.5 mn in previous 12 months), which is assisting lessen sub loss. Data usage grew 8.2% q-o-q to 4,489 bn MB as network high-quality enhanced.
Adjusted for IUC influence, revenues down 2.2% q-o-q to Rs 96 bn. VIL’s mobile revenues have been steady q-o-q if adjusted for 2 days much less in the course of the quarter, and IUC influence. This was regardless of loss of 2 mn subs due to rise in 4G subs, which need to have helped organic ARPU development. On reported basis, ARPU was down 11.6% q-o-q to Rs 107. Postpaid sub base has grown marginally by .1mn to 20.9 mn, which need to have also helped.
Cash Ebitda (adjusted for Ind-AS 116) at Rs 22 bn. Ebitda at Rs 44 bn was up 2.9% q-o-q due to one-off gains in expense (network and IT) of Rs 4.5 bn adjusted Ebitda dipped 7.6% q-o-q regardless of powerful efficiency in expense savings. Adjusted for one-offs, network expense was down 1.1% q-o-q, employee expense fell 13% q-o-q even though SG&A expense rose 18% q-o-q. Adjusted for Ind-AS 116, Ebitda was at Rs 22 bn (up 3% q-o-q and down 18% q-o-q if we adjust for one-off gains). Ebitda need to have been impacted by nil IUC income as VIL was net IUC receiver earlier.
Total debt such as AGR dues and accrued interest was Rs 1,867 bn. The figure involves deferred spectrum liability of Rs 963 bn, AGR liability of Rs 610 bn, and bank borrowing of Rs 231 bn. The liabilities due for payment in next 12 months are: (i) annual payment (involves interest) towards AGR liability of Rs 80 bn in Mar’22 (this is assuming nil payment for Mar’21 dues, which is however to be clarified) (ii) bank assure of Rs 70 bn coming up for renewal (VIL has to give added bank assure of Rs 10 bn) (iii) annual payment towards spectrum due in Apr’22 – of Rs 82 bn. Company has requested DOT for deferment of some of the payments. We see payment of liabilities coming quickly, even though fund availability remains a challenge.