Sunil Sood-led Vodafone India is the jewel in the crown for parent

Generates double operating free cash flow compared to UK ops

New Delhi, July 4: British telecommunications company Vodafone Group Plc got more free cash flow from its Indian operations compared to its business in its home country during the last financial year, according to data from its annual report for FY16.

During the fiscal through March 2016, Vodafone India generated 544 million Euros, more than double than its Vodafone UK operations that gave 265 million Eur os, the data showed. The operating cash flow from the Indian operations came despite a lower dividend from its 42% shareholding in Indus Towers, a three-way joint venture with Bharti Airtel and Idea Cellular.

During FY15, Vodafone India's operating FCF was at 332 million Euros, while its UK operations generated 185 million Euros, the data showed.

For FY16, Vodafone Group's operating FCF was 0.73% higher or at 2,884 million Euros compared to its FY15 operating FCF of 2863 million Euros. In fact, Germany contributed the largest operating free cash flow of 651 million Euros, followed by its African unit Vodacom, which gave 792 million Euros.

However, the operating free cash flow from Vodafone India to its parent company assumes significance given that the domestic operations contribute only 12% to its overall revenue, much lower than its Germany operations that constitute 19% of revenue but slightly higher than the 9% revenue contribution from Vodacom. The higher operating free cash flow is a measure of the company's financial performance and the amount that is available to be given to shareholders as dividend. The better operating FCF of Vodafone India subsidiary makes the company's proposed share sale to the public much more attractive because of the better returns that the investors can anticipate to recieve.