Vodafone Idea share price jumped nearly 4% on Wednesday, after the telecom company’s strong rebuttal against GST payment. Vodafone Idea shares gained as much as 3.96% to ₹8.39 apiece on the BSE.
Vodafone Idea has received an order under the Central Goods and Services Tax (CGST) Act, 2017, dated February 18, requiring the payment of penalty and interest.
The order, issued under Section 73 of the CGST Act, pertains to alleged excess availment of Input Tax Credit and other matters for the financial year 2020-21. It confirms a penalty of ₹97,16,875, along with the applicable tax demand and interest.
However, Vodafone Idea has refuted the claims made in the GST notice and stated that it will pursue appropriate measures for rectification or reversal.
“The maximum financial impact is to the extent of tax demand, interest and penalty levied. The Company does not agree with the Order and will take appropriate action(s) for rectification/ reversal of the same,” Vodafone Idea said in a stock exchange filing.
Vodafone Idea Q3 Results
Vodafone Idea narrowed down its net loss to ₹6,609.3 crore in the third quarter of FY25 from a loss of ₹7,175.9 crore in the previous quarter. The company’s revenue in Q3FY25 rose 1.7% to ₹11,117.3 crore from ₹10,932.2 crore, quarter-on-quarter (QoQ). Average Revenue Per User (ARPU) during the December quarter increased to ₹173 from ₹166, QoQ.
At the operational level, EBITDA grew 3.6% to ₹4,712.4 crore from ₹4,549.8 crore, while EBITDA margin was at 42.4% versus 41.6%, QoQ.
Vodafone Idea continues to lose market share to peers on account of lower ARPU translation, given its inferior subscriber mix and elevated subscriber churn.
“Despite the likely capex, we believe gaining back subscribers would be a tall ask for Vodafone Idea, given its peers’ superior free cash flow generation and deeper pockets. Further, we believe Vi’s network investments remain contingent on debt raise, which in turn is dependent on continued support or relief from the Government of India ( ₹44,000 crore+ annual repayments to GoI starting from 1HFY26). Stabilization of the subscriber base, along with further relief from GoI, remains imperative for Vodafone Idea’s long-term survival,” Motilal Oswal said.
The brokerage firm cut its FY26-27 EBITDA estimates for Vodafone Idea by 7-8% on lower subscriber and ARPU assumptions. It downgraded Vodafone Idea shares to ‘Sell’ from ‘Neutral’ and cut the target price of ₹5 per share.
At 12:50 PM, Vodafone Idea shares were trading 2.73% higher at ₹8.29 apiece on the BSE.
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