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JP Morgan also revised the target price of Vodafone Idea stock from Rs 7 to 10, implying an 8.8 per cent upside from the stock’s last closing price of Rs 9.19 per share at BSE. This price target is for December 2025.
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“We are neutral on Vodafone Idea stock as we believe the company is still in its early days of proving the success of its strategy which will start with rolling out investments, followed by stopping subscriber losses before regain share We will wait for evidence of success in “We stopped sub losses and balance sheet exposures before becoming more constructive,” JP Morgan said in a report dated October 10.
JP Morgan on Vodafone Idea shares
According to analysts at JP Morgan, Vodafone Idea has Rs 2,09,500 crore of adjusted gross revenue (AGR) and spectrum fees that it has to start paying from financial year 2025-26 (FY26). Out of this, the brokerage expects that the deferred amount of Rs 29,000 crore can be converted into equity. After this, Vodafone Idea will owe Rs 180,500 crore to the government, which will be paid in annual installments of Rs 23,400 crore in FY26-31.
“Based on our current assumption of a tariff increase of 15% each in FY26 and FY27, Vodafone Idea should be able to repay annual dues in FY26 and fiscal year 27. It could, however, be below fiscal year 28. It will have to adopt another tariff. “a 20% hike in FY28 to strengthen Cash Ebitda and ensure its ability to repay dues every year through FY31,” JP Morgan said in its report.
JP Morgan’s upgrade of Vodafone Idea shares boosted its FY27 Ebitda (estimated earnings before interest by 4 per cent and company free cash flow (FCFF) by 18 per cent. Vodafone Idea , it said, could witness a CAGR of 22 per cent in Ebitda and 38 per cent in FCFF over the next two years till FY27 due to persistent tariff hikes.
JP Morgan on Bharti Airtel, Bharti Hexacom, Indus Towers
Among other telecommunications stocks, JP Morgan is ‘overweight’ on Bharti Airtel thanks to tariff increases of 17 percent across the entire portfolio; the gap between postpaid and prepaid subscribers increases from 3x to 1.6x; expectations of a 15 percent tariff increase in November 2025 and November 2026; and a significant increase in dividends in FY25/26E thanks to improved FCF and deleveraging.
JP Morgan has set the target price of Bharti Airtel stock at Rs 1,920 for December 2025, which will increase India’s wireless revenues/Ebitda by 5-6% and margins by 50 basis points for Most of the impact of this hike is only expected to be visible in FY28, JP Morgan said. He expects Bharti Airtel to achieve its target of Rs 300-Arpu (average revenue per user) in FY27.
JP Morgan is also “overweight” on Bharti Hexacom and has a stock price target of Rs 1,580 for December 2025 (compared to Rs 1,330 for September 2025). It raised revenue and Ebitda estimates by 4-5 percent for FY27 on expectations of further tariff hikes of 15 percent.
For Indus Towers, JP Morgan analysts have set a stock price target of Rs 525 (compared to Rs 500 for September 2025). He is “overweight; note on Indus Towers also.
“We believe Vodafone Idea’s investment and tower/rental deployment plans are positive for Indus Towers and are expected to deliver double-digit revenue/Ebitda growth in FY25-27E. Secondly, Vodafone Idea’s confidence in recovering the remaining outstanding dues appears high, which is why Indus Towers went ahead and carried out the buyback of Rs 2,640 crore, effectively returning capital for the first time in two years . We believe this should result in regular dividend payments from FY26 onwards. We expect a dividend of Rs 25/30 per share in FY26/27E, implying 6 per share. cent/7 percent dividend yield, respectively,” JP Morgan said.
The brokerage considers Indus Towers shares “relatively cheap” at 7.5x EV/Ebitda and 17x price/earnings (1-year forward) compared to Bharti Airtel (11x/38x) and Bharti Hexacom ( 13.5x/39x).
What to expect from the telecom sector in Q2 FY25? See JP Morgan
JP Morgan expects Bharti Airtel to report 6.7 percent quarter-on-quarter (QoQ) growth in its India wireless revenues, driven by a 9 percent increase in Arpu. It expects a churn rate of 1.2 million subscribers for the quarter.
For Bharti Hexacom, JP Morgan analysts forecast revenue growth of 6.1 percent quarter-on-quarter, driven by a 7 percent increase in Arpu and subscriber churn of 0.2 million.
It expects Vodafone Idea to record 5.7 per cent quarter-on-quarter revenue growth in Q2FY25, led by 8 per cent growth in Arpu and amid subscriber loss of 4 million.
Indus Towers, meanwhile, could see revenue growth of 4% quarter-on-quarter, driven by tower additions.
First publication: October 11, 2024 | 9:11 a.m. STI