
Shares of Indus Towers Ltd tumbled 7 per cent in Friday's trade, as its reported financials were impacted by several one-offs on account of the consummation of tower purchases from Bharti Airtel, prior period revenue, and provision reversals. Operationally, the Q4 numbers were in line with analyst estimates but the deferral of dividend announcement disappointed investors.
"The Indus Towers board has deferred the decision on dividend/buyback and formed a committee to evaluate the modalities of returning cash to shareholders. We believe this deferral is sentimentally negative," MOFSL said.
The stock fell 7.16 per cent to hit a low of Rs 378.80. With this, it has cut its year-to-date gains to 12.10 per cent.
Driven by clearance of past dues and moderation in capex, Indus Towers' FY25 free cash flow jumped to Rs 9,850 crore. Indus Towers has used Rs 2750 crore for buyback and paid Rs 1830 crore to acquire towers from Bharti Airtel, which leaves Rs 5300 crore or Rs 20 per share for potential dividend distribution, MOFSL said.
MOFSL is factoring in a Rs 2,000 crore bad debt provisions (25 per cent of Vodafone Idea's annual service rentals) from FY27 to FY32 on account of VIL's cash constraints.
"Further, we believe there could be downside risks to tenancy additions from delays in Vi’s debt raise and, in turn, its capex spends. We reiterate our Neutral rating with a revised DCF-based target of Rs 395 as risk-reward remains fairly balanced," the brokerage said.
Arihant Capital Markets said Indus Towers' Q4 results were healthy with strong tower and tenancy additions, improved cash flows from cleared overdue payments, and plans to continue strengthening its market leadership position through customer rollouts and strategic investments.
The brokerage noted that Indus Towers' is expecting FY26 to be another strong year of growth for the company. Order book for FY26 is seen strong
Indus Towers, Arihant said, expects to add more towers and tenancies as 5G networks expand. It plans to grow through new rollouts, acquisitions, cost efficiencies, and tech upgrades while prioritising sustainability and diversity.