Vodafone Idea Share Price: Pressure Mounts, Debt Burden Influences Profit Taking

Vodafone Idea share price has extended its decline to the third session in a row as profit taking continues to pile pressure. The stock was down by 0.14% and traded at ₹7.35 at the time of writing, bringing its returns in the last five trading sessions to -1.47%. However, it carries an underlying bullish momentum, having gained 7.9% in the last month. That said, investors are concerned about a substantial debt burden that will limit its upside.

The company remains operationally profitable with a strong EBITDA margin. However, it has struggled to shake off persistent net losses, amid rising debt and negative equity. Vodafone Idea (NSE: IDEA) recently converted ₹36,950 crore of government debt into equity, raising the stake to about 49%.

Furthermore, in mid-May, the Supreme Court of India rejected the company’s plea to waive interest, penalties and interest on penalties on Adjusted Grose Revenue (AGR) dues totaling about $5 billion. That will likely dent its next quarterly earnings and could raise the downward pressure in the near-term.

With the legal avenue having run its full course and there has been no government communication regarding potential intervention. As a result, the company is working on raising approximately $2.6 billion in fresh debt financing. This will increase the debt load, creating a negative sentiment that could continue weighing down on Vodafone Idea share price.

Vodafone Idea Share Price Prediction

Vodafone Idea share price momentum calls for further downside below the pivot mark at ₹7.38. That will likely see the first support established at ₹7.32. Breaking below that level will signal a stronger momentum that could extend the downside and test ₹7.30.

On the other hand, breaking above ₹7.38 will invite the buyers to take control. That will likely see initial resistance encountered at ₹7.40. The upside narrative will be if the price breaks above that level. In addition, an extended control by the buyers could push the price higher and test ₹7.44.

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