Indus Towers Targeted to Reach Rs 350, Says ICICI Securities

ICICI Securities Downgrades Indus Towers to Reduce

Indus Towers' (Indus) fourth quarter (Q4) fiscal year 2026 earnings before interest, taxes, depreciation, and amortization (EBITDA) print was impacted by multiple one-offs and higher seasonal maintenance costs, resulting in a soft reported EBITDA growth. Despite this, the company's tower and tenancy additions remained healthy, and it has secured a good orderbook for fiscal year 2027.

The company has not seen large pending renewals for Reliance Jio Infocomm Limited (RJIL), and churn has been minimal to date. Capital expenditure (Capex) for fiscal year 2026 was high at INR 88 billion, accounting for 27% of revenue, to support growth, green initiatives, and maintenance. Indus Towers announced a dividend of INR 14 per share, representing 100% of its fiscal year 2026 free cash flow (FCF), but has not factored in any payout for the two-year dividend skip.

Outlook Below Street Expectations

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ICICI Securities' outlook for Indus Towers is below street expectations. The research firm has tweaked its earnings per share (EPS) estimates but raised capex intensity for fiscal years 2027 and 2028. Consequently, the discounted cash flow (DCF)-based target price is revised to INR 350, down from INR 390. The research firm retains its REDUCE recommendation.

Note: The above table presents a comparison of Indus Towers' Q4 fiscal year 2026 EBITDA growth and capex as a percentage of revenue with street expectations. However, as street expectations are not provided, the table only includes the relevant data for Indus Towers.