Indus Tower Q1 Results Review - Provision Reversal Lifts Ebitda: ICICI Securities

ICICI Securities Report

Indus Towers Ltd. Q1 FY25 performance was good on two counts –

1. Strong net tenancy addition, at 6,340, despite 310 exits.

2. 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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