Vodafone Idea Swings to FY26 Profit After AGR Relief Boost

MUMBAI: For Vodafone Idea, FY26 was less a turnaround tale and more a lifeline ringing at just the right time. Vodafone Idea Limited swung to a massive consolidated profit of Rs 34,552 crore for FY26, compared to a loss of Rs 27,384 crore a year earlier, after a one-time government relief tied to adjusted gross revenue (AGR) dues dramatically changed the balance sheet narrative. The telecom operator booked exceptional gains worth Rs 58,607 crore during the year, largely driven by a reduction in deferred payment obligations related to AGR liabilities and the impact of discounting those dues at present value. Without the exceptional boost, the company remained deep in the red operationally, reporting a pre-tax loss before exceptional items of Rs 24,059 crore for FY26.

Still, the numbers offered a glimpse of stabilisation in parts of the business.

Revenue from operations rose to Rs 44,873 crore in FY26 from Rs 43,572 crore in FY25, while service revenue climbed to Rs 44,782 crore against Rs 43,454 crore a year ago. For the March quarter, service revenue stood at Rs 11,299 crore, marginally lower than the Rs 11,307 crore reported in the December quarter but ahead of Rs 10,949 crore in the corresponding quarter last year.

The company posted a net profit of Rs 51,970 crore in Q4 FY26, sharply reversing the Rs 7,167 crore loss reported in the year-ago quarter, again helped by the AGR-related exceptional gains.

Beneath the headline profit, however, the pressure points remained hard to ignore.

Finance costs continued to tower over the business at Rs 21,495 crore for FY26, though they eased from Rs 24,543 crore in FY25. Depreciation and amortisation expenses stood at Rs 22,108 crore, reflecting the heavy infrastructure and spectrum burden carried by the telecom operator.

Total expenses for the year came in at Rs 69,473 crore, still significantly higher than total income of Rs 45,414 crore.

Vodafone Idea’s balance sheet also continued to reflect years of accumulated stress. The company’s total equity remained negative at Rs 35,758 crore as of 31 March 2026, though this marked a notable improvement from negative Rs 70,320 crore a year earlier.

Deferred payment obligations, the single biggest shadow over the business stood at Rs 1.45 lakh crore combined across long-term and short-term liabilities, down from nearly Rs 1.94 lakh crore in FY25.

At the same time, the company strengthened its liquidity position. Cash and cash equivalents rose sharply to Rs 2,106 crore from just Rs 257 crore a year ago, aided by fundraising efforts and improved cash generation.

Operating cash flow nearly doubled to Rs 19,411 crore in FY26 from Rs 9,290 crore in FY25. The company also generated funds through equity issuances, including Rs 17,696 crore raised via further public offering and another Rs 6,441 crore through preferential allotments.

Network investments continued despite the financial strain. Vodafone Idea spent nearly Rs 10,979 crore towards property, plant, equipment and intangible assets during the year as it attempted to strengthen network infrastructure and compete in India’s brutally competitive telecom market.

Yet the road ahead remains steep.

The telecom operator closed FY26 with total liabilities of Rs 2.27 lakh crore, including spectrum dues, lease liabilities and borrowings. While government relief has temporarily eased the pressure cooker, the company still faces the daunting challenge of growing subscribers, improving average revenue per user and funding future 5G expansion in a market dominated by deeper-pocketed rivals.

For now though, Vodafone Idea has managed to swap survival mode for breathing space. In telecom terms, the signal may still flicker but at least it has not dropped.