Shares of Vodafone Idea Ltd. received an upgrade from brokerage firm Nomura on Friday, September 20, after the stock fell nearly 20% on Thursday following a blow from the Supreme Court with regards to the AGR dues.

Nomura upgraded Vodafone Idea to “buy” from its earlier rating of “neutral” but maintained its price target at ₹15 per share.

Vodafone Idea’s shares fell on Thursday after the Supreme Court rejected a curative petition filed by the company and Bharti Airtel for re-computation of their Adjusted Gross Revenue (AGR) dues. Vodafone Idea’s current AGR dues stand at ₹70,300 crore.

The brokerage believes that the worst is over for Vodafone Idea as the AGR overhang has concluded and the recent sharp correction in the stock price, along with a strong industry outlook, presents an opportunity to buy the stock

Nomura believes that government support can ease Vodafone Idea’s funding gap. The telecom service provider had raised 18,000 crore through a Follow-On Public Offer in April this year.

However, the brokerage has maintained its estimates on Vodafone Idea, which factor in a 12% hike in Average Revenue Per User (ARPU) and slowing subscriber losses over financial year 2025 and 2026.

It is also expecting Vodafone Idea’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow at a Compounded Annual Growth Rate (CAGR) of 15% over financial year 2024-2027.

Also Read: From SBI, Axis Bank, PNB and more, these banks have exposure to Vodafone Idea

The other brokerage that has maintained its “buy” recommendation on Vodafone Idea is UBS with a price target of ₹19, which has also been the stock’s recent peak.

UBS said that the Supreme Court verdict now reduces the probability of an outright waiver of the AGR dues by the government, although and equity conversion or deferral, something that has been done before, is still on the cards.

Goldman Sachs though, continues to retain its bearish stance on Vodafone Idea with a price target of ₹2.5, which it had ascribed to in its note on September 6. The brokerage is not building in any AGR liability reduction in its base case.

However, the Supreme Court verdict does increase one of the two probabilities. One, this may result in larger and more frequent tariff hikes from Vodafone Idea and two, an increase in market share for Reliance Jio and Bharti Airtel.

In the absence of government support, Goldman Sachs expects Vodafone Idea’s Free Cash Flow to remain negative until financial year 2031, something that it wrote in its note earlier this month as well.

Also Read: Vodafone Idea shares fall below FPO price — How much would an AGR relief benefitted the stock

CLSA said that Vodafone Idea could face financial crisis in the second half of financial year 2026 or 2027 in the absence of any AGR relief. It is factoring in a risk of ₹7 per share for Vodafone Idea on the AGR matter.

For Bharti Airtel, CLSA said that the AGR risk is lower at ₹62 per share and therefore, it has retained its “outperform” rating on the stock.

Macquarie continues to see market share erosion for Vodafone Idea with “meaningful equity dilution risks.” The brokerage also said that in the absence of any relief, it may take Vodafone Idea 25-30 years to organically pay back their dues.

Shares of Vodafone Idea fell below their FPO price of ₹11 on Thursday after the near-20% drop. The stock has also halved from its recent peak of ₹19.18.

Also Read: What next for Vodafone Idea shareholders?