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HomeMarket NewsBharti, Vodafone Idea tower additions will take Indus Towers shares higher by 32%, CLSA says
With the company's high free cash flow, its dividend payouts should continue and its yields also have an upside, according to CLSA, who went on to add that at 6 times its Enterprise Value to EBITDA, the valuations of Indus Towers are cheap.
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Shares of Indus Towers Ltd. declined on Tuesday, May 26, even as brokerage firm CLSA is bullish on the stock and sees a 32% upside potential.
CLSA has a "high conviction outperform" recommendation on Indus Tower with a price target of ₹580 per share.
Indus Towers' growing tenancies are being led by two of its largest tenants, Bharti Airtel and Vodafone Idea, CLSA wrote in its note.
In financial year 2026, Indus Towers saw tenancies increase between 30,000 to 40,000, with Bharti Airtel and Vodafone Idea combining to contribute around 20,000 of those, CLSA said.
Over financial year 2026-2029, CLSA expects cumulative tower additions of 36,000 and tenancy additions of 77,000.
The brokerage went on to add that in case Indus Towers manages to retain or expand its share in this segment, it will imply tenancy additions between 1.01 lakh to 1.23 lakh.
Long-term contracts for existing tenancies that Indus Towers has, with a potential for annual escalation, account for around 90% of the company's Earnings, Tax, Depreciation and Amortisation (EBITDA).
With the company's high free cash flow, its dividend payouts should continue and its yields also have an upside, according to CLSA, who went on to add that at 6 times its Enterprise Value to EBITDA, the valuations of Indus Towers are cheap.
Of the 24 analysts who have coverage on Indus Towers, 11 have a "buy" rating, six have a "hold" rating and seven have a "sell" rating.
Shares of Indus Towers are trading 1.2% lower on Tuesday. The stock is up 8% in the last one month.
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