Distressed telecom Vodafone Idea has reported positive results for the quarter that ended in March 2023 as the company’s quarterly and annual revenues saw positive growth.

For the quarter that ended in March 2023, the company reported service revenues of Rs 10,506.5 crores, up 3% YoY while its Goods sales declined almost 50%. However, other revenues improved 4.5x times as total income reached Rs 10,626 crores, growing 3.44% YoY. 

Although quarterly revenues declined sequentially, EBITDA improved significantly as the EBITDA margin grew to 40%. Net loss for the quarter came in at Rs 6,419 crores, 2% lower than the loss of Rs 6,563 crores reported last year & down almost 20% sequentially.

For FY23, the company saw robust growth in its revenues. Service revenues grew 9.5% to Rs 42,134 crores while the sale of Goods declined marginally to Rs 8.7 crores. Other operating revenues doubled during the year as Total Income grew 10% to Rs 42,489 crores. 

The company has been steadily losing subscribers as its subscriber base stood at 225.9 million, down 7% YoY as its churn increased 40 bps to 3.8%. However, Average Revenue Per User (ARPU), a key metric in telecom, grew 9% to Rs 135. Expenses saw significant growth as marketing and finance costs surged the most, spiking 57% and 11.3% respectively. 

Total expenses surged 7% to Rs 71,764 crores as a result of which net loss for FY23 came in at Rs 29,301 crores, almost 4% higher annually, due to higher expenses, particularly its finance costs which grew due to greater interest expense as a result of its credit rating downgrade.

The company also derecognized a loan liability of 16,133 crores payable to the Indian government since it issued over 16 billion shares to the government, making the Indian government a 33.1% shareholder in it.

Investors of Vodafone Idea reacted positively to the quarter’s performance as the share witnessed a partial gap-up opening and surged 2% in early trading hours. However, sellers drove the price down as the stock currently trades around Rs 7.00 per share.