“This scenario assumes the conversion of spectrum and AGR dues payable in FY26 and FY27 into equity by the Government of India, as indicated by Vodafone Idea during its 4QFY24 earnings call. We estimate that Vodafone Idea’s total AGR and spectrum dues over this two-year period (excluding minimum payments) amount to approximately USD 8.2 billion, which is higher than the company’s potential gross cash, even assuming zero capital expenditure,” reads the report.
Goldman Sachs maintains a Sell rating on Vodafone Idea, revising its 12-month discounted cash flow (DCF)-based target price to Rs 2.5 from Rs 2.2, implying an 83 per cent downside compared to the coverage median downside of 5 per cent.
In a more optimistic scenario, assuming around 65 per cent lower AGR dues, consistent tariff increases, and no near-term government repayments (upside risks), the implied value per share could be Rs 19, suggesting a 26 per cent upside from current levels compared to the 83 per cent downside projected in the base case.