Business Desk – Telecom Company Share Price: Global brokerage firm Nomura has started coverage on telecom infrastructure company Indus Towers Limited and advised ‘Buy’. The firm has set a target price of Rs 490 per share, which is about 22% more than the current market price.
The brokerage believes that the improvement in the company’s business operations, especially the strengthening financial position of Vodafone Idea Limited, will create a strong path for the future growth of Indus Towers.
Indus Towers will benefit from Vodafone Idea
Nomura says that a large part of Indus Towers’ revenue comes from tower rent. Vodafone Idea (Vi) is one of its big clients. As Vi is improving his financial health. Is preparing for new capital investment, Indus Towers will get direct benefit from it.
Furthermore, Nomura believes that even though the current valuation of Indus Towers is lower than its global peers, the company’s operations will stabilize as it grows. This valuation gap is expected to reduce, which will lead to an increase in its share price.
Valuation gap expected to reduce
According to the brokerage, the current valuation of Indus Towers is much lower than international players like American Tower and domestic companies like Bharti Airtel. However, as the company’s operations become more stable, the tower tenancy ratio will increase. This valuation gap is expected to gradually reduce.
In its report, Nomura has emphasized the continuous increase in mobile data consumption and the rapid transition towards 5G technology. Indus Towers is poised to take advantage of these trends as telecom operators need to deploy additional equipment on towers to strengthen their network infrastructure. This will increase the revenue of the company, while the operational expenses will not increase in the same proportion, which means higher profits at lower expenses, which is the main strength of the company.
Vodafone Idea revival: A potential game changer
Vi is an important client for Indus Towers. If Vi’s financial health improves. If the operator moves forward with its network expansion plans, Indus Towers will directly benefit from this development.
Nomura estimates that Indus Towers can capture about 70% of the work to Vi’s upcoming network expansion projects. This is expected to result in a tremendous increase in both the company’s revenue and EBITDA. This growth can also compensate for other possible losses in the future.
Dividend expected to resume
Indus Towers’ cash position has improved after Vi paid the past dues. Due to this, brokerage firms estimate that the company may resume paying dividends in the fourth quarter of FY26. It is estimated that the company may declare a dividend of around ₹19 per share in FY26, which means the yield at the current share price would be around 4.7%.
The performance of Indus Towers stock has been mixed in recent times. The stock has gained 1.7% in the last five trading sessions, while it has fallen about 3% in the last one month. In contrast, the stock has gained more than 7% in the last six months. It has given returns of more than 8% in the last one year.
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