Vodafone Idea projected to see 25% profit growth by Jefferies

Jefferies has identified Vodafone Idea Limited (VIL) as a high-beta turnaround opportunity within the Indian telecom sector. The brokerage projects a 25% compound annual growth rate (CAGR) in operating profit for the company, driven by subscriber stabilization, tariff hikes, and operating leverage. Jefferies expects cash EBITDA margins to expand by 840 basis points to 29% over the FY26–29 period.

To support subscriber additions and defend market share, Vodafone Idea has been spending significantly more on dealer commissions than its competitor, Bharti Airtel. In FY26, VIL’s dealer commissions stood at 8.2% of sales, approximately twice the level of Airtel’s. The brokerage attributes these higher customer acquisition costs to existing network gaps. However, Jefferies anticipates that as VIL expands its network size—estimated to increase by 30% to 262,000 sites by FY29—the dealer commission burden will moderate to 6.5% of sales by FY29.