Neutral Indus Towers; target of Rs 170 : Motilal Oswal

Motilal Oswal recommended Neutral rating on Indus Towers with a target price of Rs 170 in its research report dated October 26, 2023.

Broker Research

October 29, 2023 / 11:12 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Indus Towers

Indus Towers (Indus) reported a subdued quarter with revenue/EBITDA of +1/-2% QoQ (in-line/6% miss), due to flat rental revenue and continued VIL provision. Tenancy additions have lagged tower additions, which impacted its profitability adversely. Further, FCF turned negative due to high capex and the amount blocked in trade receivables, primarily due to VIL. Indus is benefiting from the aggressive site additions from Bharti along with the 5G rollout, but being single-tenancy sites, it could alter the return profile despite adding linear (single-tenant) sites. Further, VIL’s weak outlook and limited funding capability could: a) dilute tenancies in the near term, and b) increase risk on the long-term tower-sharing-led business model. Subsequently, we reiterate our Neutral rating on the stock.

Outlook

We factor in a revenue/EBITDA growth of 3%/23% in FY23-25E on a low base of FY23 due to VIL write-offs, and arrive at our TP of INR170, implying an EV/tenancy ratio of INR1.6m and an EV/EBITDA ratio of 3.9x. We reiterate our Neutral rating on the stock.

For all recommendations report, click here