Explore Indus Towers’ growth prospects, financial performance, and analyst recommendations. Is it a buy? Find out about dividends, stock trends, and future outlook.
Indus Towers, a key player in the telecom infrastructure sector, is attracting attention from analysts and investors alike. This article delves into the company’s recent performance, growth outlook, and expert recommendations, providing a comprehensive overview based on available information.
Analyst’s Perspective: Citi’s Bullish Stance
Global brokerage firm Citi has reiterated a ‘buy’ rating on Indus Towers, setting a target price of Rs 490. This suggests a substantial upside potential of 46% from the stock’s closing price of Rs 335.15 on February 14. Citi’s optimism is fueled by several factors, including anticipated growth driven by network rollouts from major telecom operators like Vodafone Idea and Bharti Airtel. These rollouts are expected to significantly increase demand for Indus Towers’ infrastructure.
Citi forecasts a 15% tenancy growth for Indus Towers in FY26, following the acquisition of 16,000 towers. This acquisition is expected to expand Indus Towers’ portfolio and contribute to revenue growth. Furthermore, strong free cash flow (FCF) generation is projected to enable the company to initiate dividend payouts as early as the fourth quarter, enhancing the stock’s appeal to investors. Looking ahead, Citi sees potential in the electric vehicle (EV) charging infrastructure space, envisioning it as a large-scale, annuity-based business-to-business (B2B) model for Indus Towers, providing a stable revenue stream.
Financial Performance and Key Metrics
Indus Towers’ recent quarterly performance reflects its strong financial position and operational efficiency. The company reported a consolidated net profit of Rs 4,003 crore for the December 2024 quarter, a 159.9% year-on-year increase. This growth was supported by collections from Vodafone Idea and steady tower additions. Revenue from operations grew 4.8% to Rs 7,547 crore, while EBITDA surged 93.2% to Rs 6,997 crore. These financials underscore Indus Towers’ standing in the telecom sector.
For the quarter, Indus Towers had an average sharing factor of 1.65 per tower and added 132 new net lean colocations, bringing the total to 11,492 lean colocations.
Dividend History and Shareholder Value
Indus Towers has a limited dividend payout history. The company last declared a dividend in May 2022, an interim dividend of Rs 11 per share (record date: May 17, 2022). Prior to that, in February 2021, an interim dividend of Rs 17.82 per share was declared (record date: February 9, 2021). In addition to dividends, Indus Towers undertook a buyback of shares on August 9, 2024, as part of its strategy to return value to shareholders.
Stock Performance
Over the past year, Indus Towers’ shares have increased by 55.16%. However, the year-to-date (YTD) performance shows a decline of 2.52%. Over the last 6 months, the stock has dropped by 16.86%. In the shorter term, the stock has gained 5.64%.
Conclusion
Indus Towers is positioned for growth, supported by network expansions from major telecom operators. Citi’s ‘buy’ rating and target price of Rs 490 reflect confidence in the company’s prospects. Investors should consider various factors, including financial performance, growth potential, and expert recommendations, when evaluating Indus Towers.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Consult with a financial advisor before making investment decisions.
Sources: https://m.economictimes.com/markets/stocks/news/citi-projects-46-upside-for-indus-towers-cites-positive-growth-outlook/articleshow/118317552.cms
https://www.etnownews.com/markets/indus-towers-dividend-citi-expects-big-announcement-in-q4-buy-or-sell-article-118316853
https://www.marketsmojo.com/news/stocks-in-action/indus-towers-stock-declines-4-24-amid-broader-sector-challenges-on-february-12-2025-990559