Vodafone Idea Ltd.
ISIN: INE669E01016 • Market Cap: ₹1.52 Lakh Cr
The 5-Pillar Quality Audit for Vodafone Idea Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (42.7%), Return on Capital Employed (-1.7%), and equity compounding (—).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is -4.18 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (2.2%) and 3Y PAT CAGR (—).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 4.07 vs PEG of — and Dividend Yield of —.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 25.6%, backed by 61.2% institutional ownership.
Key Fundamental Strengths
Fortress Balance Sheet (D/E: -4.18)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
Attractive Valuation Margin (P/E: 4.07)
Trading at a P/E multiple of 4.07, the stock offers a favourable risk-reward entry for quality compounding.
Deep Institutional Sponsorship (61.2%)
Mutual funds, domestic DIIs, and foreign FIIs hold 61.2%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: -1.7%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Topline Stagnation (3Y Sales CAGR: 2.2%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Quantitative Strategy Eligibility
Checking IDEA against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 65/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Telecommunication Sector Peer Comparison
Compare IDEA directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Vodafone Idea Ltd. (IDEA)Current | 65/100 | ₹1.52 Lakh Cr | 4.07 | -1.7% | -4.18 | — |
| Indus Towers Ltd. (INDUSTOWER) | 76/100 | ₹97,876 Cr | 13.68 | 18.4% | 0.02 | View |
| Bharti Hexacom Ltd. (BHARTIHEXA) | 79/100 | ₹79,950 Cr | 43.83 | 23.9% | 0.38 | View |
| Tata Communications Ltd. (TATACOMM) | 59/100 | ₹47,330 Cr | 50.04 | 17.0% | 3.14 | View |
| HFCL Ltd. (HFCL) | 62/100 | ₹34,668 Cr | 60.55 | 8.6% | 0.37 | View |
| Sterlite Technologies Ltd. (STLTECH) | 62/100 | ₹31,629 Cr | 130.16 | 8.9% | 0.86 | View |
Frequently Asked Questions: Vodafone Idea Ltd.
Q:What is the 5-Pillar Fundamental Score for Vodafone Idea Ltd. (IDEA)?
Vodafone Idea Ltd. has a RupeeTools Fundamental Score of 65/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (47/100), Financial Health (83/100), Growth (40/100), Valuation (90/100), and Ownership Quality (72/100).
Q:Is IDEA fundamentally strong for long-term investment?
IDEA currently holds a moderate quality rating of 65/100. While it operates in the Telecommunication sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does IDEA pass the Coffee Can Investing filter?
No. IDEA does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does IDEA compare against other Telecommunication peers?
Within India's Telecommunication sector, IDEA trades at a P/E of 4.07 and generates an ROCE of -1.7%. Compare its 5-Pillar score of 65/100 against top sector peers like Indus Towers Ltd. (76/100), Bharti Hexacom Ltd. (79/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.