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ICICI Securities Report
Indus Towers Ltd. Q1 FY25 performance was good on two counts –
Strong net tenancy addition, at 6,340, despite 310 exits.
strong cash collection, including Rs 7.6 billion collected towards past overdue.
However, energy losses burgeoned due to seasonality and reconciliation disputes; and rental/tenant dipped 0.8% QoQ, largely due to lower rates and taxes pass-through revenue.
Vodafone Idea Ltd. should embark on a capex cycle, which would likely provide tenancy growth opportunity for Indus forthwith; and Indus is unperturbed by the rise in competitive intensity or price pressure.
The dominant incremental tenancy share for Indus is baked into our estimates, which remains unchanged with a discounted cash flow based target price at Rs 270.
Retain 'Sell' as current market price factors in sustained greater then 10% earning per share growth, which appears stretched.
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