The shares of Vodafone Idea have seen a strong surge recently, rallying more than 100% in one year to hit a fresh 52-week high on Tuesday, although several brokerages remain cautious and cite key headwinds for the telecom giant.Vodafone Idea on Saturday released its results for the January-March quarter of the financial year 2026. It reported a net profit of Rs 51,970 crore for the quarter under review as against a net loss of Rs 7,166 crore in the year-ago period, primarily driven by a one-time accounting gain related to the reassessment of AGR dues and recognition of the present value of future AGR payments.The firm’s revenue from operations meanwhile rose 3% year-on-year (YoY) to Rs 11,332 crore during the quarter which ended on March 31, 2026, from Rs 11,017 crore in the corresponding quarter of the previous financial year. EBITDA grew 4.9% YoY to Rs 4,889 crore, while Average revenue per user, or ARPU, rose to Rs 190 from Rs 175 in the year-ago quarter, marking an 8.3% increase.Macquarie on Vodafone IdeaMacquarie has an 'Underperform' rating for the shares of Vodafone Idea, with a target price of Rs 9 per share. This implies a downside potential of more than 33% from Tuesday's closing price of Rs 13.52 apiece. The international brokerage said that the company’s Q4 results were operationally in line with estimates, with net income being boosted by one-time gain from reversal of AGR dues.While acknowledging additional support from the government and Vodafone Idea's new ambitions, Macquarie said that it believes there is no quick fix to the company's underlying fundamental challenges. “Against VI's implicit high-teen growth ambition, MQe base-case revenue outlook, which already assumes a stabilisation of subscribe market share and mix-driven ARPU increase, speaks to a 6% revenue CAGR (FY25-28E). We prefer Bharti Airtel and Tata Communications,” it added.Citi on Vodafone IdeaCiti Research has a ‘Buy High Risk’ rating for the shares of Vodafone Idea, with a target price of Rs 14 per share. The firm noted that the telco’s Q4 performance was slightly ahead of estimates, driven by slightly better than expected ARPU and narrowing of subscriber losses to nearly nil during the quarter.Aditya Birla Group’s equity infusion via warrants (3.8% of equity) signals promoter confidence and should, in Citi’s view, catalyse closure of the long pending bank funding, which is critical for VI’s capex rollout, and would also in turn have meaningful positive implications for Indus Towers, it said. “AGR relief and promoter infusion materially improve funding visibility, while stabilising subscriber trends indicate early signs of operational recovery. Closure of bank financing now remains the key near-term catalyst for the stock,” Citi added.Also read: 'Worst behind us, Vodafone Idea starting FY27 with a clear plan', says executiveJP Morgan on Vodafone IdeaJP Morgan has an ‘Underweight’ call on the shares of Vodafone Idea, with a target price of Rs 9 apiece. The international brokerage said that the firm’s Q4 results were in line with estimates, beating expectations on some fronts.“A key issue remains the absence of bank funding crucial for capex and sustaining share. It highlighted it is in talks with an SBI-led consortium (public, private and foreign banks). We cut rev/Ebitda by 2-5%, pushing out our tariff hike assumptions. Current valuations bake in too many positives, ignoring hurdles of regaining share and slower ARPU repair,” it added.CLSA on Vodafone IdeaCLSA downgraded its rating on the shares of Vodafone Idea from ‘Outperform’ to ‘Hold’, but increased its target price to Rs 13 per share.“The CEO said Vodafone Idea is engaged in securing debt raising for a planned Rs450bn investment. We retain our forecasts, factor-in AGR dues at NPV in our valuation, lifting our target price from Rs 11 to Rs 13, however, we downgrade our rating from Outperform to Hold,” it said in its note.Nomura on Vodafone IdeaNomura downgraded the shares of Vodafone Idea from ‘Buy’ to ‘Neutral’, but increased its target price to Rs 12.60 apiece. This implies a downside potential of more than 2% from the stock’s previous closing price.The international brokerage highlighted that the company’s management has outlined a three-year strategic plan in which VIL is going to invest Rs 45,000 crore over the next three years. “To support liquidity, VIL plans to raise Rs 25,000 crore of bank funding and Rs 10,000 of non-funded facility in the near term. We think that if VIL is able to raise this bank funding, it would be a key positive for the business given its capex plan is dependent on it, which may eventually translate into arresting its subscriber loss, and realising higher ARPU from a mix of customer upgrades and higher tariffs. We also note that the government's 27% AGR relief, with payment moratorium and issuance of preferential warrants worth Rs 4,730 to promoter entity, should support VIL’s ability to raise debt capital sooner rather than later,” it added.However, Nomura downgraded its rating on the stock due to limited potential upside from current levels. It however values the stock based on 14x FY28 EV/EBITDA – higher than 12x it assigned to Bharti Airtel and Jio, given Vodafone Idea’s higher earnings CAGR potential.“We prefer Bharti Airtel among the telecom stocks under our coverage,” Nomura said, while highlighting the key catalysts for Vodafone Idea, which include successful debt-capital raise, industry tariff hikes, a reversal of the subscriber loss trend, and a strategic equity investment that may provide the much-needed confidence capital. However, key risks include a slowdown in subscriber addition and ARPU growth that could disappoint investors and might push stock back into bear territory, the brokerage added.Nuvama on Vodafone IdeaNuvama retained its ‘Hold’ rating on the stock, but increased its target price to Rs 13.5 apiece. The brokerage highlighted that the company reported a decent Q4 performance. “KPIs like subscriber addition, ARPU and churn rates are improving but a lot more needs to fall into place for VIL to become an investible idea,” it highlighted.“VIL appears to be making steady progress with improvement in ARPU and subscriber additions on one hand and reassessment of AGR dues and the 10-year moratorium on the other. However, investor attention remains focused on the delayed debt fund raise, which is critical to support capex, along with sustainability of subscriber net addition and ARPU growth,” Nuvama further said.Motilal Oswal on Vodafone IdeaMotilal Oswal Financial Services maintained its ‘Neutral’ rating on the shares of Vodafone Idea, with a target price of Rs 10 apiece, implying a downside potential of 22% from the stock’s previous closing price. “Everything must go right for the long-term revival,” the domestic brokerage said.“We believe Vi’s revival hinges on sustained tariff hikes or a change in tariff construct, stabilization in consumer wireless subs trends, more rational competition on subscriber acquisition, and continuation of a benign regulatory regime, with further relief on spectrum payments,” Motilal said, adding that not all of these variables are within management’s control.Additionally, if Vodafone Idea begins to emerge as a competitive third player, Motilal expects peers with superior FCF generation, network, and product offerings to respond with heightened competitive intensity.Axis Capital on Vodafone IdeaAxis Capital has a ‘Reduce’ rating for the shares of Vodafone Idea and a target price of Rs 10.09 apiece. “Vodafone Idea reported flat QoQ total subs, halting its sustained sub loss over the past many quarters; 4G subscriber adds though, remain tepid. Churn too came off. Usage trends have also been improving, helped by strengthening 4G network and 5G launch. This is reflected in increased data usage/customer and rising MoU. Note that these trends still remain well below the larger players,” it said.The firm highlighted that the company’s conclusion of its pending debt raise is critical for network expansion.JM Financial on Vodafone IdeaJM Financial maintained an ‘Add’ rating for the shares of Vodafone Idea but increased its target price to Rs 14 apiece. The domestic brokerage said that the key factor to watch out for both Vodafone Idea and Indus Towers would if the equity infusion by promoter gives comfort to the lenders to approve the long-pending Rs 25,000 crore debt fund-raise, needed to execute Vodafone Idea’s network-upgradation capex of Rs 45,000 to help grow its subscriber (subs) base.Ambit Insights on Vodafone IdeaAmbit Insights said that KM Birla’s return as chairman and ensuing capital infusion led to Birla Group emerging as the dominant promoter shareholder. This increases the brokerage’s confidence in Vodafone Idea’s debt fund-raising by June 2026. Ambit has a ‘Buy’ call on the stock, with a target price of Rs 17.6 apiece.“With strong promoter commitment, we believe that debt fund-raising is assured for Vi. This drives the 50 bps lower WACC rate assumption to 13.3%. Vi’s guidance of 60-70k tower rollout in the next 12-18 months vs <25k in the last 6 quarters is a key positive for Indus Towers as well. The next key positive trigger for Vi and Indus is debt funding for the former. We are positive on the telecom sector with BUYs given our positive view on the industry structure, constructive government stance and capital efficiency of the sector,” it added.ICICI Securities on Vodafone IdeaICICI Securities downgraded the shares of Vodafone Idea to ‘Reduce’ from ‘Hold’, with a target price of Rs 11 apiece. The brokerage said that lower-than-expected AGR revenue market share, failure to get more equity capital and unfavourable regulatory policies or outcome on ongoing litigations can act as some downside risks to its estimates.On the upside meanwhile, higher than expected revenue market shares and higher-than-estimated FCF generations can lead to upside.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)