HSBC ON VODAFONE IDEA
Maintain Reduce with revised target price: ₹8.25
Maintains a Reduce rating, despite recent AGR reliet
Vi's operating cash flow is likely insufficient to meet spectrum payments from FY29E, requiring ~3x OCF growth in three years
Planned ₹45,000 Cr network capex should stabilise subscriber market share, but unlikely to drive market share gains
Vi's leverage remains high at 10.1x FY27E net debt/EBITDA, keeping financial risk elevated
Stock is richly valued at 17.6x FY27E EV/EBITDA
Key upside triggers: large equity raise/ strategic partner, stronger OCF and lower-than-expected spectrum liabilities
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