Indus Towers: Centrum Broking Maintains 'Buy' With Rs 523 Target

TELECOM

Overview

Centrum Broking has reiterated its 'Buy' rating on Indus Towers Ltd., lifting the target price to ₹523. The brokerage cited improving revenue visibility, steady tenancy growth driven by data usage and 5G expansion as key factors. Strengthened balance sheets for Vodafone Idea Ltd. further enhance long-term earnings predictability, with core profitability improving despite optical margin pressures. Centrum projects a revenue CAGR of 9.3% over FY25-FY28E.

Centrum Broking is backing Indus Towers Ltd., maintaining a 'Buy' recommendation and increasing its target price to ₹523 from ₹503. This conviction stems from robust revenue visibility and consistent growth in tenancies, fueled by escalating data consumption and the ongoing nationwide 5G rollout. The brokerage also highlighted the positive impact of adjusted gross revenue relief on Vodafone Idea Ltd.'s balance sheet, which bolsters long-term earnings predictability for the tower company.

Margin Stability and Profitability

While acknowledging mixed Q3 financial numbers, Centrum Broking views margin pressures as largely "optical." The core profitability of Indus Towers and its energy efficiency measures are reportedly on an upward trajectory. The company's strong free cash flow generation, coupled with disciplined overseas expansion that offers optional upside, further underpins the positive outlook.

Growth Projections

Looking ahead, Centrum Broking forecasts compound annual growth rates (CAGR) for revenue, earnings before interest, taxes, depreciation, and amortization (Ebitda), and profit after tax (PAT) of 9.3%, 1.5%, and 11.2% respectively, between FY25 and FY28E. Separately, Anand Rathi has adjusted its earnings per share (EPS) estimates for FY26E, FY27E, and FY28E by +0.3%, -3.5%, and -2.4% respectively. The brokerage has rolled over its valuation to March 2028 estimates, applying a price-to-earnings (PE) multiple of 16.0x on projected Mar'28E earnings per share to arrive at the ₹523 target price.

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