Citi Maintains Buy Rating on Vodafone Idea Ahead of Supreme Court AGR Hearing

Breaking News:

Citigroup has retained its "buy" rating on Vodafone Idea Ltd. (VIL) ahead of the Supreme Court's AGR (Adjusted Gross Revenue) hearing scheduled for August 29, 2023.

Analyst's Perspective:

Analyst Amit Tandon stated that Citi expects a "positive resolution" for VIL and anticipates the company's financial liabilities to be manageable.

Key Points:

• Citi maintains a "buy" rating on VIL with a target price of Rs. 12.
• The Supreme Court hearing on the AGR issue is crucial for VIL's future.
• Citi believes the company will be able to manage its financial obligations.

Analysis:

The AGR issue stems from a telecom dispute between the Indian government and telecom operators, including VIL, over the definition of revenue that should be subject to license fees.

A favorable ruling for VIL could reduce the company's AGR-related liabilities, potentially improving its financial position and allowing it to focus on operational improvements and network expansion.

Market Reaction:

Citi's rating and target price have been well-received by investors. VIL's stock price rose by over 2% in early trading on the Bombay Stock Exchange.

Conclusion:

Citi's "buy" rating and positive outlook on VIL reflect the analyst's belief that the company is well-positioned to navigate the upcoming Supreme Court hearing and emerge as a stronger player in the Indian telecom market.