The second quarter results and the recent favourable order from the Supreme Court on AGR dues gave a breather to the struggling Vodafone Idea; however, the piling losses and no funding in sight pose a big challenge for the telecom company.
In the earnings call on Monday, VI’s CEO Abhijit Kishore said that the company is working with the government and banks to mitigate its financial burden. The top official, however, pointed out that the possibility of debt funding from banks largely depends on resolving the AGR dues situation with the government.
Meanwhile, the modest revenue recovery in Q2 results, despite the loss of customers, is giving the company hope for regaining the trust of the lenders.
Vodafone-Idea’s Q2 recovery
At a revenue of Rs 11,194 crore in Q2 FY26, VI reported a 2.4% YoY and 1.6% QoQ revenue growth. VI’s revenue growth in the quarter was largely aided by the Average Revenue per User (ARPU) growth, as it grew by 7.1 per cent YoY and 1.2 per cent QoQ to Rs 167.
Furthermore, VI’s EBITDA margin also improved marginally to 41.9 per cent in the quarter. As the telecom company’s ARPU increases and administrative costs are reduced, its losses narrow to Rs 5,524 crore in Q2 FY26, compared to Rs 7,175 crore in the same period last year.
VI’s total debt stood at Rs 2.02 lakh crore at the end of Q2 FY26, which includes 2.014 lakh crore of spectrum and AGR dues and Rs 1,542 crore bank debt.
“While parameters such as pace of subscriber loss and ARPU are improving, balance sheet repair is crucial for VIL’s survival”, a Nuvama report says.
Funding crunch and possibilities
In the second quarter of FY26, VI moderated its capital expenditure to Rs 17,50 crore. In the previous quarter, VI’s capex was at Rs 2,420 crore. Nuvama says that the reduction in capex by the telecom operator is due to a cash crunch and limited possibilities of debt funding.
However, VI’s CEO, Kishore, remains optimistic about the possibilities of debt funding. During the earnings call, he stated that the company is engaged with multiple funding sources, including banks and NBFCs.
But as indicated by Kishore, the banks and investors remain cautious due to AGR dues and the resolution with the government. The CEO said that the company is working very closely with the government and expects to come up with the best, long-term solution to its Rs 78,500 crore AGR due