Vodafone Idea share price cracked over 14% on Friday after foreign brokerage firm Goldman Sachs predicted an 83% downside in the stock price. Vodafone Idea shares declined as much as 14.44% to a low of ₹12.91 apiece on the BSE.
Goldman Sachs maintained a ‘Sell’ rating on Vodafone Idea shares and raised the target price marginally to ₹2.5 apiece from ₹2.2 earlier, predicting a downside of more than 83% from Thursday’s closing price.
The brokerage firm believes that Vodafone Idea’s recent capital raise, while incrementally positive for the company, is unlikely to be adequate to stop its market share erosion, a CNBC-TV18 report said. Goldman Sachs forecast another 300 bps share loss over the next 3-4 years.
Goldman Sachs estimates Average Revenue Per User (ARPU) would have to rise by ₹200 – 270 for Vodafone Idea to be sustainably free cash flow neutral, the report added.
Moreover, the brokerage also sees limited reasons for Vodafone Idea’s substantial premium to Bharti Airtel and Jio, given its weaker growth, margin returns, and balance sheet profile versus peers, according to the report.
At 10:45 am, Vodafone Idea shares were trading 12.19% lower at ₹13.25 apiece on the BSE.
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