Vodafone Idea Shares Fall Despite Record Profit Amid Accounting Adjustments Vodafone Idea’s stock plummeted nearly 3% on the day following its Q4 FY26 results, despite the company reporting a record net profit of ₹51,970 crore. The sharp decline puzzled investors, as the profit figure seemed to suggest a turnaround for the telecom giant, which had been losing money for six consecutive years. However, the market’s reaction revealed deeper concerns about the sustainability of the profit and the company’s underlying financial health. The profit figure was largely driven by a one-time accounting adjustment related to the company’s Adjusted Gross Revenue (AGR) liabilities. AGR, a key metric for telecom companies, represents the fees they pay to the government for using spectrum and licenses. After a reassessment by the Department of Telecommunications (DoT), Vodafone Idea’s AGR dues were reduced from ₹87,695 crore to ₹64,046 crore. This reduction was structured as a long-term payment plan, with ₹100 crore annually over four years (FY32-FY35) and ₹10,608 crore annually over six years (FY36-FY41). The accounting rules allowed the company to recognize this liability at its present value, creating a one-time gain of ₹57,491 crore. This adjustment inflated the profit figure, masking the fact that the company’s core telecom operations remained unprofitable. Without the accounting gain, Vodafone Idea would have reported a quarterly loss of approximately ₹5,515 crore, a 23.05% improvement over the previous year’s loss of ₹7,167 crore. However, the company’s operational losses persisted, and no significant cash inflows were generated from its core business.#aditya_birla_group #indian_government #vodafone_idea #department_of_telecommunications #surya_ja_investments
