Jefferies rates Vodafone Idea buy with Rs 20 target

Shares of Vodafone Idea are likely to remain in focus after global brokerage Jefferies initiated coverage on the telecom operator with a Buy rating and a price target of Rs 20 per share. The target implies a 29% upside from current market levels. Jefferies sees Vodafone Idea as a high-beta turnaround opportunity, with subscriber stabilisation, operating leverage and tariff-led earnings growth expected to support the recovery. The brokerage forecasts an 11% revenue CAGR over FY26-29 as subscriber trends stabilise, while cash EBITDA is expected to grow at a 25% CAGR over FY26-31. Jefferies expects network investments to help reduce churn and support gross subscriber additions, potentially leading to a turnaround in subscriber additions from FY28. It also sees room for premiumisation, given Vodafone Idea's lower share of data subscribers. Jefferies expects revenue to grow at an 11% CAGR over FY26-29, driven by subscriber stabilisation, premiumisation and tariff-led ARPU growth. It expects operating leverage to drive a significant improvement in Vodafone Idea's cash EBITDA margin, which it forecasts will expand by 840 basis points to 29% over FY26-29. The brokerage estimates incremental EBITDA margins of around 50% over FY26-29.