Shares of Vodafone Idea fell over 2% in Monday's trade on the NSE despite the telecom major reporting a sharp turnaround in its March quarter earnings for FY26, aided by a one-time accounting gain linked to AGR dues.

The stock was trading at Rs 12.65, down 2.32%, during the session in Monday afternoon trade.

Vodafone Idea reported a consolidated net profit of Rs 51,970 crore for Q4FY26, compared with a net loss of Rs 7,166 crore in the year-ago quarter.

The profit was largely driven by a one-off accounting gain arising from the reassessment of AGR liabilities and recognition of the present value of future AGR payments.

On the operational front, the company showed signs of improvement. Revenue for the quarter rose 2.9% year-on-year to Rs 11,332 crore, while EBITDA increased 4.9% to Rs 4,890 crore. The telecom operator also reported positive monthly subscriber additions from February 2026, supported by its ongoing 4G expansion and wider 5G rollout.

Brokerages remained cautious despite improving fundamentals.

Macquarie maintained its ‘Underperform’ rating with a target price of Rs 9. The brokerage said, "Q4 operating performance was largely in line with expectations," but noted that reported profit was boosted by the one-time AGR-related gain. It highlighted that Vodafone Idea's subscriber base declined marginally by around 100,000 quarter-on-quarter to 193 million, though ARPU improved 1.2% sequentially to Rs 174 per month. As of March-end, the company's government dues stood at nearly $16 billion, while cash balance remained at around $0.6 billion. Macquarie also noted the board's approval of a Rs 4,730 crore fundraise through promoter warrants.

UBS retained its ‘Neutral’ rating with a target price of Rs 12.40, calling the quarter an early sign of operational stabilization. The brokerage noted that revenue remained largely flat sequentially, while EBITDA rose 1.5% quarter-on-quarter as lower personnel and access costs supported margin expansion.

However, UBS pointed out that adjusted net loss came in at Rs 5,510 crore, higher than estimates, and said a significantly larger equity or debt fundraising would still be necessary to sustain the recovery momentum.

Reacting on the development, Khushi Mistry, Research Analyst at Bonanza said, “Vi's Q4 "profit" of Rs 51,970 crore is an accounting illusion it came from a one-time AGR liability reassessment, not the business. Strip that out and Vi posted an operational loss of Rs 5,515 crore in Q4 and Rs 24,059 crore for FY26. Adding pressure: the board approved 430 crore warrants to raise Rs 4,730 crore, signalling fresh dilution. The stock fell as much as 3.7% to Rs 12.47, also weighed down by a broadly weak market. Investors are looking past the headline and selling the reality.”