Indus Towers

Indus Towers reported quarterly revenue of INR 81.9 billion, growing 9.7% year-on-year, driven by strong tower additions of 4,301 macro towers and 4,505 co-locations. The company added 3,900 solar sites during the quarter, bringing the total to 36,000 sites. EBITDA declined 6% year-on-year to INR 46.1 billion with margins at 56.3%, impacted by prolonged monsoon conditions affecting energy costs. The company announced its foray into Africa, starting with Nigeria, Uganda, and Zambia, leveraging Bharti Airtel as an anchor customer. Management expects strong order book momentum for the next 3-4 quarters in India. The company maintained industry-leading network uptime of 99.965% despite adverse weather conditions. Energy margins remained negative at -4.8% due to increased diesel consumption from extended monsoon season.

Indus Towers shares traded over 3% higher following strong quarterly results and optimism around Vodafone Idea's prospects. The company reported EBITDA margins expanding 180 basis points sequentially to 56.3%, aided by a ₹195.2 crore writeback of provisions for doubtful debts related to Vi. Revenue rose 1.6% quarter-on-quarter and 9.7% year-on-year, while net profit climbed 5.9% sequentially to ₹1,839.3 crore. Tower additions increased to 4,301 compared to 2,468 in the previous quarter. The Supreme Court's decision allowing the government to reconsider Vi's AGR dues has sparked optimism, as relief could improve Vi's cash flows and enable completion of its ₹50,000-₹55,000 crore capex plan, potentially boosting tenancy growth for Indus Towers. Jefferies upgraded the stock to 'Buy' with a target price of ₹425, citing expected 6% profit CAGR over FY26-28 and 7% dividend yield. CLSA maintains 'High Conviction Outperform' rating with ₹520 target price, while IIFL raised its target from ₹369 to ₹407. Brokerages see dividend reinstatement as a key trigger, with IIFL expecting potential dividend resumption or share buyback by end of FY26.

Indus Towers has announced strategic targets for FY27, aiming to achieve annual revenue of ₹35,000 crore and a return on capital employed (ROCE) of 30%. The company plans to expand its tower base to over 2.75 lakh towers. Key growth drivers include expansion into Africa, implementation of AI-enabled operational efficiencies, and capitalizing on 5G rollout demand. However, the company expects short-term EBITDA pressure during this growth phase.