In early trading, Vodafone Idea's stock price fell by more than 6% after Goldman Sachs raised serious concerns in a recent study. The company kept its "Sell" recommendation on the stock in spite of a minor change to the target price. It appears that the telecom behemoth has a difficult road ahead of it.
Over the following three to four years, Vodafone Idea's market share could decline by an additional 300 basis points. Investors should be cautious of possible growth because Goldman estimates that the company's share value won't surpass Rs 19 even in favorable conditions.
Shares of Indus Towers dropped more than 2% after Goldman Sachs reduced the company's stock recommendation to "Sell." The company's valuation has drawn criticism because growth prospects are still unclear for the medium to long term.
Goldman Sachs feels that Indus Towers' recent re-rating was excessive, even if the company's stock price has increased by 75% in the last six months. The current price of the stock is Rs 443, which is far more than the brokerage's target price of Rs 350.
Anxieties over Vodafone Idea's poor financial performance remain. The stock's best-case value is still low despite a 65% decrease in adjusted gross revenue due to tariff rises that have been ongoing. This heightens doubts over its capacity to pay.
For Indus Towers, Vodafone Idea is a significant client. Any postponement in Vodafone's financial recuperation may have detrimental effects on the future of Indus Towers. Goldman Sachs holds off on making any changes to Vodafone's balance sheet.
Vodafone Idea is struggling, but Bharti Airtel is doing well. Airtel's target price was raised to Rs 1,700 by Goldman Sachs, who predicted significant increases in EBITDA and revenue. The company projects significant improvements in Airtel's balance sheet and free cash flow by FY28.
Vodafone Idea's declining market share and dire financial outlook portend a gloomy future for the company. Given the company's increasing difficulties in a very competitive telecom market, investors are still wary.
The share price of Vodafone Idea is still on a rapid downward track due to a decline in market confidence. The stock's future is becoming less and less secure as additional market share loss is anticipated and financial difficulties are ahead.