BofA update shows where active managers are putting money
Investing.com - UBS downgraded Vodafone (NASDAQ:VOD) Idea Ltd. (NSE:IDEA) stock rating to Neutral from Buy, while lowering its price target to INR8.50 from INR12.10.
The downgrade comes as UBS expects an 11% average revenue per user (ARPU) compound annual growth rate over FY25-28, primarily driven by a projected 10-12% tariff hike in FY26, with later years largely supported by secular factors.
UBS highlighted risks that the anticipated FY26 tariff hike could be delayed or implemented at a lower magnitude than expected, creating uncertainty around revenue projections.
The firm noted Vodafone Idea has been unable to raise debt capital, while government relief measures have not materialized, resulting in continued market share losses over the past year and the suspension of FY27 capital expenditure plans.
Despite UBS maintaining a base case that some form of relief will eventually emerge, given the government’s stated desire to maintain three private telecommunications companies, the firm cited difficulties in determining the "manner, magnitude or timing of such reliefs" as reasons to remain on the sidelines.
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