Vodafone Idea reported a sharp narrowing of its net loss to Rs 3,754 crore in the June 2026 quarter from Rs 6,611 crore in the corresponding quarter of the previous year. The improvement was largely supported by relief on liabilities and a notional gain arising from shares held by promoter Vodafone Group for the benefit of the telecom company.

Vodafone Idea qualified for around Rs 5,836 crore under a liability claim arrangement with Vodafone Group. In addition, Vodafone Group set aside 328 crore shares held in Vodafone Idea for the company's benefit. These shares were valued at Rs 4,435 crore at the end of the June 2026 quarter, resulting in a gain of Rs 1,816 crore during the quarter. The gain was recognised as an exceptional item and contributed significantly to the reduction in the reported loss.

Revenue from operations increased 6 percent year on year to Rs 11,689 crore from Rs 11,023 crore in Q1 FY26. Finance costs declined 13 percent to Rs 5,120 crore from Rs 5,893 crore in the year-ago quarter, providing additional support to the company's financial performance.

Vodafone Idea's overall subscriber base declined around 2 percent year on year to 19.31 crore from 19.77 crore. However, the subscriber base increased compared with the March 2026 quarter, while the company's 4G and 5G subscriber base grew around 2 percent year on year to 13 crore from 12.74 crore.

Customer ARPU improved 10.2 percent to Rs 195 in Q1 FY27 from Rs 177 in Q1 FY26, reflecting higher revenue generation from its customer base. Blended ARPU, which includes revenue from all mobile connections including machine-to-machine SIMs, increased 7.2 percent to Rs 177 from Rs 165 a year earlier. Average data usage among 4G and 5G subscribers also increased significantly to 21.7 GB during the quarter from 17.3 GB in the corresponding period last year.

The company's operating performance remained relatively stable, with EBITDA rising 3 percent sequentially and 9 percent year on year to Rs 5,030 crore. However, funding for network expansion and capital expenditure remains a key concern for the company. Vodafone Idea's debt stood at around Rs 1.53 lakh crore at the end of Q1 FY27, including spectrum-related debt of approximately Rs 1.30 lakh crore.

Vodafone Idea has outlined a three-year capital expenditure plan of Rs 45,000 crore and has already placed orders worth around Rs 9,000 crore. Capital expenditure during the June quarter stood at Rs 1,930 crore. The company also secured funding of Rs 6,400 crore during the quarter, including warrants and fund and non-fund based facilities.

The company's statutory payment liabilities stood at Rs 1.56 lakh crore as of June 30, 2026. Vodafone Idea is required to pay Rs 9,259 crore to the Department of Telecommunications by June 2027 as part of its payment obligations.

Brokerages continue to highlight funding and industry-level tariff increases as key factors for the stock's future performance. Nomura maintained a neutral rating with a target price of Rs 12.60, identifying successful debt fundraising, tariff hikes, subscriber additions and potential strategic equity investment as key catalysts. CLSA retained a hold rating with a target price of Rs 13, while JPMorgan maintained an underweight rating with a target price of Rs 9, citing the absence of bank funding as a key concern for capital expenditure and business sustainability.

Vodafone Idea shares were trading around 1.8 percent higher at Rs 13.14 at 10:10 am on August 11, following the company's quarterly results.