New Delhi: Vodafone Idea saw a promising 2.5% surge in its shares during early trading on November 9th, thanks to a favourable decision by the Bombay High Court. The court directed the income-tax department to refund a substantial amount of Rs 1,128 crore that the telecom giant had paid in dues back in 2016-17. At 10:19 am, Vodafone Idea’s stock was up by 1.5% at Rs 13.85 on the National Stock Exchange.
The court’s ruling labelled the assessment order against the telecom major as “unsustainable and time-barred.” An income tax officer issued this assessment order on August 31, two years after a dispute resolution panel had already provided directions to Vodafone Idea. The company contested the order, pointing out that the assessing officer had failed to deliver a final decision within the stipulated 30-day period.
In a significant move, the court also recommended an inquiry against the assessing officer for “failure to abide by the legal mandate and a lack of diligence on the part of officials involved.” The court stressed the importance of taking “strict action against those responsible for the laxity and lethargy displayed,” which had resulted in a substantial loss to the government and, by extension, the citizens of the country. Furthermore, the court set a 30-day deadline for completing the process.
Vodafone Idea recently disclosed its Q2 earnings, where it reported a widening net loss of Rs 8,737.9 crore compared to Rs 7,595.5 crore in the same quarter the previous year. However, there were positive aspects in the results, including a stable revenue of Rs 10,716.3 crore year-on-year, driven by an improved subscriber mix and 4G subscriber additions. Notably, the EBITDA margin saw a 140 basis points increase to reach 40% in Q2.
The company’s blended average revenue per user (ARPU) per month also saw an annual increase, reaching Rs 142 from Rs 131 in the base period. While the ARPU improved sequentially from the previous quarter’s Rs 139, it remains lower than its competitors, Jio and Bharti Airtel. In addition, Vodafone Idea made significant progress in reducing its net debt by Rs 7,220 crore over the past year, bringing it down to Rs 2,12,660 crore at the end of Q2.