Time period given by analyst is one year when Indus Towers Ltd. price can reach defined target.
Indus Towers Ltd., incorporated in the year 2006, is a Large Cap company (having a market cap of Rs 72992.37 Crore) operating in Telecommunications sector.
Indus Towers Ltd. key Products/Revenue Segments include Income from Infrastructure Activity for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 6853.90 Crore, up 4.34 % from last quarter Total Income of Rs 6569.10 Crore and up 314.91 % from last year same quarter Total Income of Rs 1651.90 Crore. Company reported net profit after tax of Rs 1415.30 Crore in latest quarter.
Investment Rationale
Indus Towers’ (Indus) stock price increased >20% post government reform in the telecom sector announced a few days ago, which has increased VIL’s going concern visibility. However, VIL still has a long way to go as it needs tariff hike and recouping of some market share. Even in a bull case where VIL incurs capex to catch up on 4G capacity gap compared to Bharti Airtel (Bharti), we don’t see material benefit to Indus. The analysis shows VIL does not need much of cellsite addition, but it needs to expand 4G BTS which comes at marginal cost (loading charges). Further, tenancy expansion from 5G is at least 2-3 years away and visibility on other businesses such as fibre is limited. The brokerage has retained estimates for Indus, but cut WACC to 10.8% (from 12.8%) on VIL’s reduced going concern risk. It has revised DCF-based target price works out to Rs266 (earlier: Rs232).
Promoter/FII Holdings
Promoters held 69.9 per cent stake in the company as of June 30, 2021, while FIIs held 26.9 per cent, DIIs 29.9 per cent and public and others 0.8 per cent.
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