Indus Towers Ltd (NSE: INDUSTOWER) Share: Indus Towers’ share increased by more than 2 percent in the early trading, September 11.
The rise in the share of the company has been prompted by a report from an acclaimed brokerage firm.
The brokerage firm has not just improved Indus Towers’ rating but it has also raised the price of its target by 47 percent.
The brokerage has raised its rating for Indus Towers’ share from neutral to ‘Overweight and raised its price target from Rs 350 to Rs 500.
This is a gain of approximately 17 percent over the closing price.
At 1:50 P.M., Indus Towers’ share was trading at Rs 434.25 on the NSE in the range of 2.08 percent. In the initial quarter of the calendar year, Indus Towers’ share has increased by about 114 percent.
However, it has also reported that in the last year, it’s given an approximate return of Rs 125.58 percent to its shareholders.
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The Brokerage Gave 3 Main Reasons Behind Increasing The Rating Of Indus Towers-
- Better Prospects From Vodafone Idea
The brokerage believes Vodafone Idea’s capital spending and improvements in tower or tenancy rollouts will result in double-digit growth in Indus Towers’ revenues and operating profits in FY 2025-27.
- Reduction In Vodafone Idea’s Outstanding Payments
The brokerage stated it believes that Vodafone Idea also seems capable of paying back its prior dues and the balance is now Rs 46 billion.
There is also a sense of optimism that the company will be successful in collecting the rest of the owed fees. If this occurs, the way could be cleared to pay the regular dividend starting in FY26.
- Operating Profit And EPS Growth Expected
The brokerage firm believes that the company’s operating profits will increase by 11 percent as well as the earnings per share (EPS) by 17 percent in the period from FY 2024 through 2027.
The brokerage stated that based on this assumption, it considers the valuation of the company superior to Bharti Airtel and Bharti Hexcom.
But, in the middle of March another brokerage company from around the world, downgraded Indus Towers’ rating from “Neutral” to “Sell”.
However, they increased their price target from Rs 220 and up to Rs 350. The brokerage claimed that it believes that the company’s fundamentals are improving and has increased EBITDA estimates by as much as 17 percent.
However, it’s not sure of a further re-rating for Indus Towers. The analyst believes the decrease in the market share of Vodafone Idea will continue to put pressure on Indus Towers.
Quick Fact
| Company name | Indus Towers |
|---|---|
| Price increase | Over 2% |
| Brokerage firm rating | From Neutral to Overweight |
| Possible target price | ₹500 |
| Previous target price | ₹350 |
| Share gain potential | 17% over last close |
| Share price | ₹434.25 |
| Share range (%) | 2.08% |
| Share increase this quarter | 114% |
| Shareholder return (last year) | 125.58% |
| Vodafone Idea impact | Better capital spending, tower rollouts |
| Expected revenue/profit growth | Double-digit growth FY 2025-27 |
| Vodafone Idea payment due | ₹46 billion |
| Dividend possibility | FY26 |
| Operating profit growth estimate | 11% FY 2024-2027 |
| EPS growth estimate | 17% FY 2024-2027 |
| Comparison | Superior to Bharti Airtel, Bharti Hexcom |
| Downgrade by other brokerage | From Neutral to Sell |
| Alternative target price | ₹350 |
| Previous target price | ₹220 |
| The downgrade by other brokerage | Vodafone Idea’s market share decline |
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