Global Markets
Home›Global Markets›Trade & Tariffs›Jefferies initiates Vodafone Idea coverage on tariff h…
Jefferies initiates Vodafone Idea coverage on tariff hike upside
The brokerage sets a ₹20 target, and says cumulative 30% tariff increases in FY27 to FY29 could lift the stock to ₹36.
Jefferies has initiated coverage of Vodafone Idea with a Buy rating, arguing that subscriber stabilisation, operating leverage, and tariff hikes could drive a turnaround for the company. In its base case, the brokerage expects the stock to target ₹20 per share.
Jefferies points to recent momentum, noting Vodafone Idea shares have climbed more than 70% over the past year and the stock’s market capitalisation has returned above ₹1 lakh crore, supported by improving financial performance, rising ARPU, and recovery in the subscriber base. The brokerage also links tariff-led revenue growth to premiumisation, saying Vodafone Idea has room to translate tariff increases into higher sales given its lower share of data subscribers.
In a bull case, Jefferies estimates the stock could reach ₹36, implying 132% upside, assuming cumulative tariff hikes of 30% during FY27 to FY29E. In a bear case where no tariff hikes occur in the same period, it projects the stock could fall to ₹9.
Jefferies expects network investments to reduce churn further and support a turnaround in subscriber additions from FY28. Financially, it forecasts an 11% revenue compound annual growth rate over FY26 to FY29, and calls for an 840 basis point expansion in cash EBITDA margin to 29% over FY26 to FY29, though it flags a temporary cash flow mismatch as annual outflows rise to more than ₹400 billion during FY29 to FY34.