Vodafone Idea's Q2 loss expands to Rs 7,595.5 crore, shares down 1.4%

Vi had faced a net loss of Rs 7,296 crore in the first quarter of FY23.

Due to a rise in finance and operating costs, Vodafone Idea's (Vi) net loss increased 6.4% year over year (YoY) to Rs 7,595 sequentially from Rs 7,296 crore. A day after its net loss for the fiscal second quarter of FY23, as it continued to experience significant subscriber losses, Vi's shares initially declined 1.4% on the BSE.

The business reported a net loss of Rs 7,132 crore over the comparable period in the previous year. On a consecutive basis, the net loss increased by 4%.

According to a not from ICICI Direct Research, "Vi's reported EBITDA margins were down 298 bps QoQ to 38.6%, below estimate of 41.4% owing to higher than anticipated network opex, which was up 16% QoQ and higher marketing expense.

Vi had faced a net loss of Rs 7,296 crore in the first quarter of FY23.

Earnings before interest, tax, depreciation, and amortization (Ebitda), which measure a company's profitability, climbed by 6% to Rs 4,097 crore during the second quarter of FY23, while gross revenue jumped by 12.8% YoY to Rs 10,614 crore.

Its finance expenses increased 18.7% to Rs 6,033 crore while operational expenses rose 17.5% YoY to 6,517 crore. The average revenue per user (ARPU) increased to Rs 131 from Rs 128 in Q1 of FY23, an increase of 2.3% QoQ.

A few vendors have even requested immediate payment of past due amounts, and the company's ability to operate as a going concern depends on its ability to raise money and negotiate favorable terms with its suppliers.

As of right now, the group has paid off all of its debts, according to Vi.

At the end of the second quarter, the company's user base totaled 234.4 million, with a decrease of six million sequential users. Nevertheless, To 120.6 million, the 4G client base increased consecutively by 1.6 million.

Customers using 4G saw a sequential rise in data usage of 4.6% reaching 15 GB per month. Vi has been experiencing operational and financial difficulties, and earlier rating downgrades have raised the cost of borrowing money.

Due to freshly purchased spectrum, spectrum liabilities have increased, and Vi's bank debt has seen progressive decrease. Deffered spectrum Liabilities and bank borrowings made up the 2.2 trillion rupees in gross debt as of the end of September.

Vi chief executive officer Akshaya Moondra said in a statement that the business was in discussions with lenders and investors about additional finance raising for network development and the roll-out of 5G.

While Vi has not yet finalized its contracts for 5G network equipment, competing companies Airtel and Jio have already launched 5G services in the country.

More than Rs 4,900 crore has been invested by the the promoters of Vi, the Aditya Birla group and Vodafone Group Plc. According to Moondra, the business achieved revenue growth for a sixth straight quarter and an increase in 4G subscribers.

"We remain committed to increasing the capacity and coverage of our high-speed internet network. In order to improve our core and transmission networks and increase our 4G coverage capacity, we also keep refarming 2G and 3G spectrum," the business added.