Vodafone Idea Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Vodafone Idea reported a quarter of modest revenue and EBITDA growth, driven by ARPU improvement and network expansion. The company continued its 5G rollout and 4G coverage enhancement, leading to increased data usage. However, Cash EBITDA saw a YoY decline due to investment-related costs, and the significant AGR debt remains a key focus, impacting long-term funding prospects despite a recent Supreme Court judgment.

Highlights

  • Revenue of ₹11,190 crores, up 2.4% YoY and 1.6% QoQ.

  • Reported EBITDA improved 3% YoY to ₹4,690 crores, with margin expanding 20 bps to 41.9%.

  • ARPU increased 8.7% YoY to ₹180.

  • 4G/5G subscriber base reached 127.8 million, adding 0.4 million over the last 12 months.

  • 5G services expanded to 29 cities in all 17 circles where the company holds 5G spectrum.

Concerns

  • Cash EBITDA declined 3.4% YoY to ₹2,250 crores due to higher network operating costs from the investment cycle.

  • Marginal drop in overall subscribers this quarter, attributed to seasonality.

  • High AGR debt of ~₹79,000 crores remains outstanding, with banks potentially awaiting clarity on its resolution for long-term funding.

Key financials

2 periods

Headline

  • Revenue
    ₹11,190 Cr
    YoY +2.4% QoQ +1.6%
  • Reported EBITDA
    ₹4,690 Cr
    YoY +3% QoQ +1.6%
  • Reported EBITDA Margin
    41.9%
    YoY +0.2%
  • Cash EBITDA
    ₹2,250 Cr
    YoY -3.4% QoQ +3%
  • Cash EBITDA Margin
    21.1%
    QoQ +0.3%
  • ARPU
    ₹180
    YoY +8.7%
  • 4G/5G Subscribers
    127.8 Mn

Q2 FY26

  • Capex
    ₹1,750 Cr

What they filed

Q1 FY27: revenue up 5.8%, net profit up 44.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue10,841 11,024 10,880 10,906 11,068 +2%11,214 +2%11,197 +3%11,539 +6%
EBITDA4,351 4,553 4,420 4,355 4,457 +2%4,602 +1%4,653 +5%4,808 +10%
Net profit-7,210 -6,493 -7,268 -6,633 -5,584 +23%-5,324 +18%52,022 +816%-3,712 +44%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹1,750 Cr this quarter · ₹7,500 Cr (FY26) planned internal accrual
    • 4G and 5G coverage expansion
    • Core and transmission network
    On the capex for the H2, we have spent Rs. 4,200 crores towards capex in the H1, and our guidance is that we would be in a position from a year-on point of view, roughly in the range of Rs. 7,500 crores to Rs. 8,000 crores of capex by the end of FY26. We are not really looking for any external funding for this particular capex, which is part of the internal accrual as well as the money that we have. Our focus continues to be expanding 4G and 5G coverage.
  • Debt Debt disclosed
    The debt from banks has further reduced to Rs. 15.3 billion as of September 30th from Rs. 32.5 billion as of September 30th, 2024, a reduction of Rs. 17.2 billion in the last 12 months. The cash and bank balance stands at Rs. 13.8 billion as of September 30, 2025.
  • Liquidity Cash ₹1,380 Cr
    The cash and bank balance stands at Rs. 13.8 billion as of September 30, 2025.

Guidance & targets

Capex

  • FY26 Capex Capex · FY26 · High confidence ₹7,500-8,000 crores
    On the capex for the H2, we have spent Rs. 4,200 crores towards capex in the H1, and our guidance is that we would be in a position from a year-on point of view, roughly in the range of Rs. 7,500 crores to Rs. 8,000 crores of capex by the end of FY26.

    — Abhijit Kishore

Coverage

  • 4G Population Coverage Coverage · next couple of quarters · Medium confidence 90%
    We are right now at 84%, and our sense is that over the next couple of quarters, we should be able to get to 90%. I cannot really give you a finite timeline right now, and the approximate capex that is required, would be, in the range of Rs. 4,000-odd crores for the coverage between our 84% to our 90%.

    — Abhijit Kishore

Subscriber Growth

  • Net Subscriber Additions Subscriber Growth · soon · Medium confidence inflecting to positive
    We firmly believe that the more sites and the more 4G and 5G sites that we roll, we will start to see this trajectory inflecting to positive.

    — Abhijit Kishore

What to watch in Q3 FY26

AGR Dues Resolution

next quarter
Current Supreme Court permitted government to reconsider AGR demand
Target Concrete steps or timeline from DoT/Government

Why it matters

Resolution of AGR dues is crucial for securing long-term debt funding and overall financial stability.

Our sense is that since the Supreme Court order has come recently, there might be a little bit of a dependency on that from the banks when they are looking at extending long-term funding. But we are engaged with them and working closely, as and when we get to a solution, we will come back to you.

Risks & concerns

  • AGR Dues Resolution Timeline

    high

    The Supreme Court order allows the government to reconsider AGR demand, but the timeline for a definitive solution remains uncertain, impacting bank funding.

    Management acknowledged

  • Tariff Hike Implementation

    medium

    While a tariff hike is seen as necessary, its timing and industry consensus are uncertain, which could impact ARPU growth.

    Management acknowledged

Q&A highlights

6 direct
Subscriber Trends and BSNL Competition Direct
There is some bit of seasonality impact as well, but the fundamentals of the business are intact and we do not see ourselves making any changes to our long-term view as far as the subscriber is concerned. Also, we continue to see the 4G and 5G devices addition on our network as we are rolling out more and more 5G sites and 4G sites.

Management attributes subscriber losses to seasonality and emphasizes network improvements and propositions to retain customers, downplaying BSNL's impact.

Asked by Rishabh Dhancholia

FY26 Capex Outlook and Funding Direct
On the capex for the H2, we have spent Rs. 4,200 crores towards capex in the H1, and our guidance is that we would be in a position from a year-on point of view, roughly in the range of Rs. 7,500 crores to Rs. 8,000 crores of capex by the end of FY26. We are not really looking for any external funding for this particular capex, which is part of the internal accrual as well as the money that we have.

Provides clear capex guidance for the full fiscal year and clarifies that it will be funded through internal accruals, reducing immediate external funding pressure.

Asked by Rishabh Dhancholia

Timeline for Positive Subscriber Additions Partial
We firmly believe that the more sites and the more 4G and 5G sites that we roll, we will start to see this trajectory inflecting to positive.

Indicates management's strategy for subscriber growth is tied to network expansion, but avoids giving a specific timeline for positive net additions.

Asked by Rishabh Dhancholia

Data Customer Growth and Early Investment Areas Direct
We have added 4 lakh customers this quarter as far as the 4G/5G subscribers are concerned... in the circles where we have invested early, we clearly see better traction and lesser churn... We see higher engagement as far as data usage is concerned and we also see better traction in customer acquisition.

Highlights the impact of targeted investments on customer engagement and acquisition in specific regions, validating the investment strategy.

Asked by Sanjesh Jain

Drop in Finance Costs Direct
No, it is not to do with the moratorium. There have been some settlements with some various vendors, on account of which we have made some provisions in the previous quarter that are now reversed, and also a slight favorable impact on lower forex fluctuation, which has contributed to the decrease in the interest cost.

Clarifies the drivers behind the significant reduction in finance costs, ruling out the moratorium and pointing to operational and forex factors.

Asked by Sanjesh Jain

Fund Raise and AGR Judgment Impact on Banks Partial
Our sense is that since the Supreme Court order has come recently, there might be a little bit of a dependency on that from the banks when they are looking at extending long-term funding. But we are engaged with them and working closely, as and when we get to a solution, we will come back to you.

Reveals that banks are likely waiting for government action on AGR dues before committing to long-term funding, indicating a potential delay in capital raise.

Asked by Saurabh Handa

Total AGR Debt Quantum Direct
The principal and the interest, we cannot share, but as of September 25, is around Rs. 79,000 crores - Rs. 78,500 crores of total amount on the AGR.

Provides a specific, large figure for the outstanding AGR debt, which remains a significant liability for the company.

Asked by Saurabh Handa

5G Network Architecture (SA vs. NSA) and Rollout Strategy Direct
At Vodafone Idea Limited, we have taken the route of NSA architecture and that is what we are rolling out right now. At the same time, I can also say that at any point in time that we decide to move to the SA architecture, our current architecture is capable of moving to SA.

Confirms the company's current NSA strategy for 5G rollout and its future flexibility to transition to SA, addressing a key technical and cost-efficiency aspect of 5G deployment.

Asked by Vivekanand

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Detailed narrative

Q2 FY26 Financial Performance Overview

Vodafone Idea reported Q2 FY26 revenue of ₹11,190 crores, marking a 2.4% year-on-year growth and a 1.6% sequential increase. Reported EBITDA improved by 3% YoY to ₹4,690 crores, with the margin expanding 20 basis points to 41.9%. However, Cash EBITDA declined 3.4% YoY to ₹2,250 crores, attributed to higher network operating costs from the ongoing investment cycle. ARPU saw an 8.7% YoY increase, reaching ₹180, reflecting improved customer value and product propositions.

Network Expansion and 5G Rollout Progress

The company significantly expanded its network, increasing 4G population coverage from 77% in March 2024 to over 84% by September 2025. Capex for Q2 FY26 was ₹1,750 crores, contributing to the addition of over 1,500 new unique 4G towers. 5G services have been launched in all 17 circles where the company holds spectrum, covering 29 cities, with plans for further expansion based on customer demand and 5G handset penetration. The company aims to reach 90% 4G coverage in the next couple of quarters with an additional capex of approximately ₹4,000 crores.

Customer Engagement and Product Initiatives Drive Data Usage

Vodafone Idea's focus on customer experience led to the launch of the 'Non-Stop Hero Plan' offering unlimited data 24/7, which has driven new customer acquisitions and upgrades. The 'Vi Guarantee Program' also served as a retention tool, providing extra validity. These initiatives contributed to a 21.4% YoY growth in overall data traffic and a 20.3% increase in data usage by 4G/5G subscribers, with average data usage per customer reaching 18.5 GB/day. The 4G/5G subscriber base reached 127.8 million, adding 0.4 million over the last 12 months.

Vi Business Growth and Digital Transformation

Vi Business demonstrated strong momentum, showcasing leadership in enterprise digital transformation at IMC 2025 with new offerings like an IoT innovation lab and AI-powered solutions. The Smart Metering business aims to deploy 12 million solutions in the next three years, positioning Vi as a key enabler of India's smart energy transition. Strategic partnerships, such as with Google for MSMEs, and rapid adoption of AI-powered Contact Center as a Service (CCaaS) further strengthen its enterprise offerings, contributing to its position as a trusted digital partner.

AGR Judgment and Debt Management

The Hon'ble Supreme Court's judgment in October and November 2025 permitted the Government of India to reconsider and reconcile additional AGR demands. The company is in discussions with the DoT regarding next steps, with total outstanding AGR dues, including interest and penalty, estimated at approximately ₹79,000 crores as of September 25. Debt from banks reduced by ₹1,720 crores over the last 12 months to ₹1,530 crores as of September 30, 2025, with cash and bank balances at ₹1,380 crores. The reduction in finance costs was attributed to vendor settlements and favorable forex fluctuations.

Capital Expenditure and Funding Outlook

Vodafone Idea plans a total capex of ₹7,500-8,000 crores for FY26, with ₹4,200 crores already spent in H1 FY26. This capex is primarily for expanding 4G and 5G coverage, along with core and transmission network upgrades, and will be funded through internal accruals. The company is actively engaged with lenders to secure long-term debt financing for its broader capex plans of ₹50,000-55,000 crores. However, banks may be awaiting clarity on AGR dues resolution before committing to long-term funding.

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