Indus Towers Ltd. share price target

Indus Towers’ (Indus) 1QFY27 was slightly weaker than our estimates, with recurring EBITDA (excl. provisions) rising 1% QoQ to INR45b, largely due to higher under-recoveries and marginally lower ARPT (flat QoQ).

Indus Towers’ (Indus) 4QFY26 was slightly weaker than our estimates, with recurring EBITDA (excl. provisions) declining 1% QoQ to INR44.3b.

Indus Towers’ (Indus) Q4FY26 EBITDA print was impacted by multiple one-offs and higher seasonal maintenance costs; therefore, reported EBITDA growth appeared soft.

As per market consensus, Indus Towers is currently trading at a 1year fwd. P/E of 15x ( 3 year Avg P/E of 12x). Indus Towers is advancing its strategic expansion into African markets while maintaining a strong focus on operational excellence, digital transformation, and customer...

Indus Towers’ (Indus) 3QFY26 was broadly in line with our estimates, with recurring EBITDA (excl. provision reversals) rising 2% QoQ to INR44.7b. Operationally, tenancy additions picked up QoQ (after a subdued 2Q), driven by acceleration in Vi’s rollouts during 3Q.

Indus Towers (Indus) reported strong results, with slightly higher revenue than street estimate and 50bps QoQ rise in EBITDA margin, adjusting for provision reversal.

Indus Towers’ (Indus) 2QFY26 was broadly in line with our estimates, with recurring EBITDA (excl. provision reversals) rising 3% QoQ to INR43.8b.

Indus Towers’ (Indus) Q4FY25 performance was good led by, excluding acquisition, tenancy addition of 8.2k, which was much better than tower net adds of 4.3k, implying a rising tenancy sharing ratio. Tenancy adds benefitted from network rollout by VIL; and 2) strong FCF in FY25, including provision reversals.

Indus Towers (Indus)’ 4QFY25 reported financials were impacted by several one-offs on account of the consummation of tower purchases from Bharti Airtel, prior period revenue, and provision reversals.

Update Note

Indus’ 2QFY25 reported financials came in ahead of our estimate owing to a higher-than-estimated reversal of prior period bad debt provisions (INR10.8b vs. our estimate of INR5b).

Indus Towers’ (Indus) Q2FY25 performance was good on two counts: 1) stable net tenancy addition at 4,308 with some benefit already showing from VIL/BSNL rollout; and 2) strong cash collection, including INR 10.8bn collected towards past overdue.

Indus Towers’ (Indus) Q1FY25 performance was good on two counts, Strong net tenancy addition, at 6,340, despite 310 exits and strong cash collection.

We met Vikas Poddar, CFO of Indus Towers (Indus) on 27 Jun’24. Takeaways: 1) Indus remains excited about growth in the tower industry driven by rural expansion by Bharti, and 4G rollout from VIL. It expects a fair share in VIL’s expansion, despite the risk of higher competitive intensity

Indus Towers (Indus) reported a flat revenue QoQ, but provision write-offs
and lower power costs led to 14%/20% QoQ growth in EBITDA/PAT (a beat
of 12%/41%). The tower additions were led by only one operator, which
moderated the ASF.

Reported rental revenue up 7.7% YoY/2.2% QoQ to INR 45.8bn in Q4FY24.

Our valuation for Indus now bakes in the VIL capex. Our recalibrated model envisions Indus’ rental revenue/EBITDA/ net profit CAGRs of 9.3%/10.2%/14.4% over FY24–27E.

Indus Towers’ (Indus) Q2FY24 performance was good on two counts: 1) tenancy addition accelerated with net add of 5,583 despite 840 exits; and 2) there was no large provisioning that had marred EBITDA previously. However, rising single-tenancy towers are continuously diluting margins and RoCE, and VIL has to significantly recover to increase visibility on rising tenancy sharing over medium term.