Vodafone Idea share price jumps over 4% as UBS upgrades stock to ‘buy’

Vodafone Idea share price jumped over 4% on Friday's session after global brokerage UBS upgraded its rating to ‘buy’ from ‘Neutral’, with a revised target price of ₹18 from ₹13.10 previously. Vodafone Idea share price opened at an intraday low of ₹14.23 and touched an intraday high of ₹14.75 on the BSE. 

Rajesh Bhosale, Technical Analyst at Angel One, said that the stock has seen a gap- up opening and is witnessing follow-up buying in the initial trades. If the gains persist, then we may see further short-term upmoves, possibly towards 15.8. Support would be the gap left around 14.10 below which the prices will further slip into their negative trend.

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According to UBS, which predicts a 70–80% Vodafone Idea rally in the near future, a respite in the form of an AGR decrease by the Supreme Court or equity conversion, along with government moratoriums, is quite possible, especially considering the government's declared goal of maintaining three independent private telecoms.

As of right now, UBS' target price of ₹18 on Vodafone Idea is predicated on a 50% chance that AGR dues would be waived. Although there is a chance for additional relief measures such spectrum due cancellation, postponement, or equitisation, UBS regards these as less plausible and does not account for them in its base price target calculations.

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"Vodafone Idea is most leveraged to any such relief, yet the stock is trading at similar c1 1 times FY26e EV/Ebitda as Airtel and Jio. We believe risk-reward is attractive going into any such announcement and upgrade to Buy," it said.

The brokerage stated in its report that it has maintained Neutral on Bharti Airtel and Indus Towers.

According to the global brokerage, it has also modified its forecasts for Indus and currently factors in three viable private telcos for the Indian telco sector. They predict that the tenancy ratio would rise from 1.68x in FY24 to 1.70x in FY28, and that the majority of Vodafone Idea's receivables will be paid off, bringing their DCF value to ₹355 per share. The brokerage continue to be Neutral nevertheless.

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