IDEA FALL AS HSBC MAINTAINS ‘REDUCE’ RATING DESPITE

Vodafone Idea Ltd slipped in Tuesday’s trade after HSBC retained its ‘Reduce’ rating on the telecom operator, despite raising its target price to ₹8.25. The brokerage cautioned that the company’s operating cash flows may remain insufficient to meet its spectrum payment obligations, even as tariff hikes drive earnings growth. Vodafone Idea shares were trading 0.83% lower at ₹15.47 in afternoon trade. The stock had rallied around 7.7% over the previous two sessions. Despite Tuesday’s decline, the shares remain up nearly 33% so far in 2026, significantly outperforming the Nifty 50, which has fallen around 9% during the same period. Vodafone Idea’s market capitalisation stood at approximately ₹1.68 lakh crore. HSBC expects Vodafone Idea’s network investments to help stabilise its market share but does not anticipate these investments translating into significant market-share gains. The brokerage forecasts EBITDA to grow at a compound annual growth rate of around 15% between FY26 and FY29, with the expansion driven primarily by an expected increase in telecom tariffs. However, funding requirements remain a key concern. HSBC noted that Vodafone Idea’s capital needs could extend beyond its FY29 spectrum payment obligations, with additional funding likely to be required for spectrum renewals starting in 2030.