Vodafone Idea Limited Q2 loss widens to Rs 5,975 crore

Vodafone Idea Limited reported a consolidated net loss of Rs 5,975 crore in Q2FY27, widening from Rs 5,524 crore a year earlier despite revenue from operations increasing 6.2% to Rs 11,884 crore. Vi recorded a Rs 462 crore exceptional loss from remeasuring settlement assets, while finance costs and depreciation together totalled Rs 10,856 crore.

Why did Vi's Q2FY27 net loss widen?

Vi's reported net loss widened mainly because Q2FY27 included a Rs 462 crore exceptional loss, compared with a Rs 38 crore exceptional gain in Q2FY26. Before exceptional items and tax, the consolidated loss narrowed to Rs 5,499 crore from Rs 5,565 crore a year earlier. The reversal in exceptional items, followed by Rs 14 crore of current and deferred tax, took the reported quarterly loss to Rs 5,975 crore.

The quarter-on-quarter comparison was more pronounced because Q1FY27 included a Rs 1,611 crore exceptional gain. Vi's reported loss was Rs 3,754 crore in Q1FY27, while the loss before exceptional items and tax was Rs 5,358 crore. In Q2FY27, that underlying loss increased by Rs 141 crore to Rs 5,499 crore and the exceptional movement became adverse.

Loss per share was Rs 0.55 in Q2FY27, compared with Rs 0.51 in Q2FY26 and Rs 0.35 in Q1FY27. For the six months ended September 30, 2026, Vi reported a net loss of Rs 9,729 crore, lower than the Rs 12,132 crore loss in the comparable prior-year period, when the company had not received the Q1FY27 exceptional gain.

How did Vi's revenue and operating measures change?

Vi increased revenue from operations by 6.2% year on year and 1.7% sequentially to Rs 11,884 crore in Q2FY27. Service revenue, its largest revenue line, rose to Rs 11,835 crore from Rs 11,168 crore in Q2FY26 and Rs 11,662 crore in Q1FY27. Other income increased to Rs 376 crore from Rs 102 crore a year earlier, lifting total income to Rs 12,260 crore.

Cash earnings before interest, tax, depreciation and amortisation, or cash EBITDA, measured before Indian Accounting Standard 116, increased 11.2% year on year to Rs 2,498 crore. The cash EBITDA margin was 21.0%, compared with 20.1% in Q2FY26, but was below the 21.2% reported in Q1FY27. Reported EBITDA rose 6.3% year on year to Rs 4,981 crore, compared with Rs 4,685 crore a year earlier.

Customer average revenue per user, or ARPU, excluding machine-to-machine connections, rose to Rs 198 from Rs 180 in Q2FY26 and Rs 195 in Q1FY27. Vi attributed the 9.7% year-on-year increase primarily to customer upgrades. Its subscriber base rose by 1.3 million sequentially to 194.4 million, while 4G and 5G subscribers reached 131.0 million, up from 127.8 million a year earlier.

Which costs and exceptional items affected Vi's earnings?

Vi's finance costs were Rs 5,351 crore in Q2FY27, up from Rs 4,784 crore in Q2FY26 and Rs 5,120 crore in Q1FY27. Depreciation and amortisation were Rs 5,505 crore, lower than Rs 5,568 crore a year earlier but above Rs 5,467 crore in the preceding quarter. Together, those two charges exceeded the quarter's Rs 11,884 crore revenue from operations.

Several operating cost lines also increased year on year in Q2FY27. Network expenses and information-technology outsourcing costs rose to Rs 2,443 crore from Rs 2,363 crore, while roaming and access charges increased to Rs 1,338 crore from Rs 1,136 crore. Marketing, content, customer-acquisition and service costs reached Rs 1,285 crore, and licence fees and spectrum usage charges were Rs 1,005 crore.

The Rs 462 crore exceptional loss resulted from the fair-value remeasurement of settlement assets at September 30, 2026. Certain Vodafone Group entities had earmarked 328 crore Vi equity shares for five years under an amended implementation agreement involving the promoters of erstwhile Vodafone India Limited. Vi valued the earmarked shares at Rs 3,972 crore after transaction and incidental costs, and the media release described the charge as an adverse mark-to-market movement in treasury assets.

What do Vi's funding, obligations and network plans show?

Vi generated Rs 11,554 crore of net cash from operating activities in the six months ended September 30, 2026, up from Rs 10,472 crore in the previous year's comparable period. It spent Rs 4,258 crore on property, plant, equipment and intangible assets, Rs 645 crore on spectrum deferred-payment obligations and Rs 1,299 crore on current investments. Net cash used in investing activities rose to Rs 4,462 crore from Rs 1,792 crore.

Financing activities used Rs 5,231 crore in the six-month period, compared with Rs 8,069 crore a year earlier. Lease-liability payments accounted for Rs 5,112 crore and interest and finance charges for Rs 1,518 crore, partly offset by Rs 1,182 crore from convertible share warrants and Rs 857 crore of long-term borrowings. Cash and cash equivalents were Rs 3,967 crore at September 30, 2026, compared with Rs 2,106 crore at March 31, 2026.

Vi reported negative net worth of Rs 44,298 crore at September 30, 2026. Outstanding debt from banks, non-convertible debentures and others was Rs 4,543 crore, with Rs 3,108 crore of scheduled instalments, plus interest, due by September 2027. Spectrum obligations were Rs 131,268 crore and adjusted gross revenue, or AGR, obligations were Rs 26,264 crore; scheduled instalments against those deferred obligations were Rs 9,216 crore by September 2027.

Management said Vi had secured more than Rs 10,500 crore of funding through H1FY27, including warrants and fund- and non-fund-based facilities, with more than Rs 4,000 crore of incremental bank funding arranged in Q2FY27. Quarterly capital expenditure was Rs 3,946 crore, up 104.5% sequentially. Vi had placed capex orders above Rs 13,200 crore, with nearly Rs 6,000 crore executed, under its three-year capex guidance.

Conclusion

Vi's Q2FY27 results combine higher revenue, ARPU, subscribers and cash EBITDA with a wider reported loss. Revenue from operations increased by Rs 689 crore year on year, but the reported loss increased by Rs 451 crore as a Rs 462 crore settlement-asset remeasurement loss replaced the Rs 38 crore gain recorded in Q2FY26. Finance costs and depreciation remained the largest charges affecting the quarterly result.

The next disclosures to watch are progress in discussions to raise additional bank funding, execution of the more than Rs 13,200 crore capex order book and scheduled obligations due by September 2027. Vi said it had expanded 5G coverage to 400 cities and towns and raised 4G population coverage to almost 88% by September 2026; management expects planned investment to lift 4G coverage in its 17 key circles above 95%.