Shares Updates on Indus tower

Category : Knowledge Center

The biggest concern for Indus Towers is that its growth potential may be diminishing due to the following reasons:

• High Rate of Tenancy Addition: The company has been adding new tenants (telecom operators using their towers) at a fast pace. However, analysts are worried that this high rate of tenancy addition might not be sustainable in the future. This concern arises because Bharti Airtel, one of the major tenants, is close to completing its rural 4G rollout, and the upcoming 5G rollout is expected to involve more loading (equipment installation) rather than significant new tenancy additions.
• Rising Single Tenancy Towers: Indus Towers has seen an increase in towers with only one telecom operator using them, known as single-tenancy towers. This is not favourable for the company as it earns revenue by providing tower-sharing services to multiple operators.
• Financial Challenges: Vodafone Idea, one of the significant customers of Indus Towers, has been facing severe financial challenges, which has affected its ability to make timely payments to the tower leasing company.
• Analyst Views: Most analysts are either neutral or bearish on Indus Towers' stock, expressing concerns about its future prospects. Some analysts have downgraded the stock and reduced their earnings estimates for the company.
• Citi's Positive View: However, not all analysts are pessimistic. Citi has maintained a "buy" rating on Indus Towers and even raised the target price, indicating optimism about the company's performance. They highlight that the company's Q1 performance was in line with expectations, and monthly collections from Vodafone Idea remain at 100 percent of billings, which is seen as a positive sign.