Analysts’ Insights on Indus Tower’s Recent Performance
CLSA has issued a “High Conviction” recommendation on Indus Tower, raising its target price to Rs 580. The company reported a core revenue of Rs 53 billion for Q4, marking a 5% year-on-year increase and a 1% rise quarter-on-quarter. Core EBITDA, adjusted for past due collections, rose by 6% year-on-year and remained flat sequentially, aligning with CLSA’s estimates. The company achieved net tenancy additions of 6,192 in Q4 and expanded its tower count by 4,892, bringing the total to 264,514—both figures being the highest for any quarter in FY26. For FY26, EBITDA grew by 11% year-on-year, with the CEO expressing optimism for future growth. Additionally, AGR relief for Vodafone Idea (Vi) is seen as a positive development for Indus. After a three-year hiatus, the board reinstated a dividend of Rs 14 for FY26. Indus also reported net cash of Rs 49 billion on its balance sheet, with lease liabilities at 132% of total debt. CLSA continues to project a 10% CAGR for core EBITDA through FY29, deeming the valuation compelling at 6x EV/EBITDA.
Nomura has rated Indus Towers as a “Buy,” increasing its target price to Rs 505. The firm noted stability in Q4 results and robust tenancy additions. The reinstatement of dividends and the potential for a lower AGR for Vi are positive signs, which could facilitate debt raises. However, Nomura observed a marginal sequential decline in EBITDA due to heightened seasonal maintenance expenses. Currently, Indus stocks trade at 13.3x FY28F P/E and 6.3x EV/EBITDA. Progress towards debt raises for Vi is identified as a critical catalyst for Indus Towers.
UBS maintains a “Neutral” rating with a target price of Rs 495. The firm described Q4FY26 as displaying softer results, with the Rs 14 per share dividend falling short of expectations. Operating metrics showed the addition of about 4,900 towers—surpassing previous quarter figures—and around 6,200 tenancies, consistent with earlier quarters. The tenancy ratio remained stable at 1.62x both quarter-on-quarter and year-on-year. Average revenue per tower declined by 1% QoQ to Rs 66.6k and average rental per tenant decreased by 0.8% to Rs 41.1k, falling 2-3% short of estimates. Sequentially, capital expenditure rose to Rs 23.3 billion, with FY26 capex reaching approximately Rs 88 billion, a 28% year-on-year increase. Key updates include the recommended Rs 14/share final dividend, resulting in a 52% payout ratio, and the board’s approval to establish a GIFT city subsidiary for investment holding overseas and treasury operations.
HSBC expressed a “Reduce” rating with a target price of Rs 345, citing lower free cash flow and dividends compared to estimates, alongside a 28% year-on-year capex growth. The bank indicated that excessive tenancy additions from Vi are already priced into the stock, while rental rates could remain pressured due to a lack of pricing power. Slower-than-expected free cash flow growth is viewed as a potential catalyst for a stock de-rating.
Jefferies also holds a “Underperform” rating with a lowered target price of Rs 370. The firm noted that Q4 results were in line with expectations, but the dividend announcement of Rs 14 per share was a negative surprise. Jefferies projects a modest 3% EPS CAGR for FY26-29, alongside a sub-4% dividend yield, which reduces the attractiveness of the risk-reward profile. Following a reassessment of Vi’s AGR liabilities and dividend payout adjustments, Jefferies observes limited positive triggers amid impending renewal risks.
DAM Capital issued a “Neutral” rating with a target price of Rs 434, indicating that Indus’ financial results were broadly in line with estimates. Tower additions exceeded expectations, primarily driven by new towers, while incremental tenancies remained muted with about 1,300 additions. Elevated maintenance capex and stagnant average rental per tower continue to be areas of concern. DAM Capital predicts revenue, adjusted EBITDA, and profit after tax CAGRs of 8%, 6%, and 6% respectively for FY26-28E, adjusting its multiple from 7.5x to 7.0x due to the impact of higher capex and the existing overhang from Jio sites.
