Vodafone Idea Limited (VIL) on Monday released its performance results for Q1 FY25. To view the full results, you can check the link below. Here, we discuss the company’s net debt. Vodafone Idea’s debt to the government and banks increased in Q1 FY25. It was on a downward trend at the end of Q4 FY24. Rising debt for the company is not that bad if it is at moderate levels in the near term. However, it is still something that should not be ignored.
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Vi said that “the total debt of banks and financial institutions as on June 30, 2024 stood at Rs. 46.5 billion and the optionally convertible bonds stood at Rs. 1.6 billion.”
To give you a comparison, the telecom operator’s total debt with banks and financial institutions at the end of Q4 FY24 was Rs 40.4 billion. So, this has gone up by Rs 6.1 billion or rather Rs 610 crore. The government debt also shot up. At the end of Q4 FY24, the debt owed to the government was Rs 2,034.3 billion. At the end of Q1 FY25, it had gone up to Rs 2,095.2 billion. The cash and bank balance stood at Rs 181.5 billion for Vi at the end of the June 2024 quarter.
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What was not good was a decline in overall revenues, even if it was a marginal decline, it does not look good. The tariff hikes that took place at the beginning of the September 2024 quarter will help boost revenues from 4G subscribers. The telco’s 4G subscriber base needs to grow significantly in the coming months to grab a larger share of the revenue market share.
Goods Lack of 5G could be one of the reasons why users are abandoning the telco’s networks. It would be interesting to see when Vi 5G will be rolled out commercially and if the debt will increase further in the coming quarters.
