Global investment banking firm Jefferies has outlined sharply divergent scenarios for Vodafone Idea Ltd., projecting a potential 143% rally from current levels in its bull case and a 25% decline in its bear case. According to The Economic Times, the brokerage's bull case scenario prices in a cumulative tariff hike of 25% over financial year 2027-2029 and sets a price target of ₹29 per share, which implies a valuation of 22 times EV/Cash EBITDA. This scenario assumes ongoing network rollouts and tariff hikes will position the company for strong growth over the coming years. The brokerage estimates that every 10% tariff hike could increase cash EBITDA by 17%, with the same tariff increase potentially translating into a 38% rise in market capitalisation.
Jefferies has reiterated its 'Buy' rating on Vodafone Idea shares while cutting its target price to ₹16 per share from ₹20 earlier. According to The Economic Times, the revised target price implies an upside potential of nearly 34% from Monday's closing price of ₹11.95. The brokerage has lowered its target valuation multiple to 20 times enterprise value (EV) to cash EBITDA from its earlier estimate, citing higher yields. However, it expects ongoing network expansion and potential tariff hikes to support the company's revenue growth and profitability over the coming years. Applying an EV/EBITDA multiple range of 18-22x against the current multiple of 21x, Jefferies estimates Vodafone Idea's fair value at ₹9-29 per share, pointing to a favourable risk-reward profile.
Vodafone Idea's active mobile subscriber base, excluding machine-to-machine connections, has shown significant stabilization over the past three months. As reported by The Economic Times, the average monthly subscriber decline has narrowed to 0.6 million from 1 million during the preceding two years. This improvement has been supported by Vodafone Idea's broadband base stations increasing 39% and network sites expanding 14% over the past two years. The brokerage expects the company's network sites to increase 26% to 2.61 lakh by FY29, which could improve network coverage, boost gross subscriber additions and reduce customer churn. According to The Economic Times, Jefferies anticipates a 6 million increase in Vodafone Idea's subscriber base over financial year 2027-2029, which should support better translation of tariff hikes into revenue.
Jefferies expects Vodafone Idea to deliver a compound annual growth rate (CAGR) of 11% in revenue and 25% in cash EBITDA over FY26-FY29. According to The Economic Times, the brokerage estimates that over FY26-29E, Vodafone Idea will deliver revenue and cash EBITDA CAGRs of 11% and 25%, respectively. Assuming incremental cash EBITDA margins of 45-55% and cumulative tariff hikes of 0-25% between FY27 and FY29, cash EBITDA could range from ₹147 billion to ₹224 billion, implying EBITDA growth of 20-45%. Given the company's high financial leverage, the same tariff increase could translate into a 38% rise in market capitalisation. The ongoing network rollouts and tariff hikes should position the company for this projected growth trajectory over the financial year 2026-2029 period.
Shares of Vodafone Idea are trading 2% higher at ₹12.18 on Tuesday, as reported by CNBC TV18. However, the stock has corrected nearly 23% from recent highs despite improving subscriber trends. The stock is down 10% in the last one month, thereby trimming its 2026 advance to just 5%. According to The Economic Times, 22 analysts have coverage on Vodafone Idea, of which 10 have a 'sell' rating, eight say 'hold', and only four have a 'buy' recommendation. The consensus estimate of price targets implies no upside potential from current levels. Despite the recent correction, Vodafone Idea currently trades at 21 times cash EV/EBITDA, below its five-year average valuation multiple, making the risk-reward attractive according to Jefferies analysis.
