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    Citigroup lowers target price for Voda Idea

    Synopsis

    Vodafone Idea shares plunged 11 per cent to close at Rs 3.03 on Tuesday.

    voda-Idea
    Citigroup said Vodafone Idea’s prospects remain ‘extremely precarious’ with its net debt/operating profit at 20 times.
    Mumbai: Citigroup has dropped its target price for Vodafone Idea citing uncertainty over the next recourse for the company after the Supreme Court on Monday dismissed the telecom operator’s plea to direct the telecom department not to take any coercive action against it on the adjusted gross revenue (AGR) dues.

    “While it may still be possible for the government to offer relief perhaps via some legislative/policy action if it so chooses, we are yet to see any such indication or willingness from the government,” the brokerage said in a client note, while retaining its neutral rating on the stock. “Given the heightened uncertainty, we find it hard to ascribe an equity value to the stock.” Vodafone Idea shares plunged 11 per cent to close at Rs 3.03 on Tuesday. Citigroup said Vodafone Idea’s prospects remain ‘extremely precarious’ with its net debt/operating profit at 20 times.

    “The company has admitted that its ability to continue as a going concern remains at risk in the absence of relief on its over $6 billion AGR liability,” said Citi. “While some green shoots were visible in 3Q (+2 per cent qoq revenue growth, 4G sub adds accelerated, tariff hike benefits to be visible from 4Q), this could come to naught without any relief.”




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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