Global brokerage Jefferies has started coverage on Vodafone Idea with a 'Buy' rating and a ₹20 price target, suggesting a potential 30% upside. The thesis centers on the company’s push for high-paying subscribers and improved operational efficiency. However, the outlook depends on future mobile tariff hikes and the company's ability to manage upcoming funding requirements of ₹16,000 crore in FY30.
Global brokerage firm Jefferies has started tracking Vodafone Idea, issuing a 'Buy' rating with a price target of ₹20 per share. This target suggests a potential upside of approximately 30 percent from the stock's recent trading level of ₹15.51. The brokerage’s outlook is based on the company’s ongoing efforts to improve its network and shift its customer base toward more profitable, high-value plans.
Focus on High-Value Users and Network Growth
Vodafone Idea is working to change the mix of its customers. According to the brokerage, the company has increased its share of high-value subscribers to 67 percent as of March 2026, up from 43 percent in 2021. By investing in 4G and 5G network expansion, the company aims to retain these customers and reduce the number of people leaving the network. The brokerage expects this strategy to support an 11 percent annual revenue growth rate between the 2026 and 2029 financial years.
Operational Efficiency and Profit Outlook
Financial projections suggest the company is moving toward better operational efficiency. As the company grows its revenue, the brokerage expects a strong boost in its cash EBITDA margins—a measure of core operating profitability. These margins are projected to rise by 840 basis points to reach 29 percent over the next three years. This trend is driven by operating leverage, which simply means that as revenue grows, more of it can be converted into profit since fixed costs are spread over a larger revenue base. Analysts anticipate that as the company completes its current heavy spending on network infrastructure, these margins could further improve by fiscal year 2030.
Funding Requirements and Industry Risks
While the operational outlook is positive, the balance sheet remains a key area for investors to track. The company has a significant financial path ahead, including an estimated need for a ₹16,000 crore equity infusion in the 2030 financial year. If successful, this equity raise is expected to trigger the government's conversion of ₹15,300 crore in spectrum liabilities into equity, which would help in managing the debt burden.
A critical factor for Vodafone Idea is industry pricing power. The brokerage notes that the company’s equity value is highly sensitive to mobile tariff hikes, estimating that every 10 percent increase in industry rates could lead to a 34 percent upside in equity value. Consequently, any delay in industry-wide price increases or a slowdown in demand remains a risk. Investors should continue to monitor the company's progress on its capital spending plans, the timeline for the anticipated equity infusion, and broader trends in telecom tariff adjustments.