ICICI Securities's research report on Indus Tower
Indus Towers’ (Indus) Q4FY25 performance was good led by: 1) 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 has also seen a rise in rental/tenants, reflecting the benefit of rising 5G loading; but it may see a dip as tenancy sharing rises with VIL’s rollout.
Outlook
We have baked in a dominant incremental tenancy share for Indus in the VIL rollout. We would watch Indus’ efforts to build new businesses that can help grow earnings slightly faster. We increase EPS by 3–4% (FY26E-27E) baking in the Bharti Airtel towers acquisition. Accordingly, our DCF-based TP rises to INR 350 (from INR 335). Maintain REDUCE.
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