Indus Towers Update - Client’s Financial Distress, Key Concern: Reliance Securities
Traffic passes mobile phone telecommunications towers in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Indus Towers Update - Client’s Financial Distress, Key Concern: Reliance Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Reliance Securities Report

Looking ahead, Reliance Securities expects Indus Towers Ltd.’s revenue growth rate to slow down to 3% CAGR over FY20-FY24E.

We expect co-locations to be added at run rate of 8,000/year, which will dilute its tenancy ratio to 1.8x.

While we expect Ebitda and EPS to clock 3%/5% CAGR each over FY20-24E, we expect its Ebitda margin at 50% in FY24E.

In light of decadal low tower tenancy ratio, no scope for further rise in rentals, likely client concentration risk, delay in tariff hike and launch of 4G/5G-enabled smart phones by Jio + Google, we initiate coverage on Indus Tower with SELL and a DCF-based 2-Year Target Price of Rs 201 at implied valuation of 3.5x EV/Ebitda of FY24E.

Click on the attachment to read the full report:

Reliance Securities Indus Tower Company Update.pdf

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