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UBS has maintained a 'Buy' rating on Vodafone Idea, despite cutting its price target from ₹19 to ₹13, reflecting a 32% reduction. The stock, trading at similar valuations to Airtel and Jio, shows an attractive risk-reward profile, with potential upside from relief measures on statutory dues. Meanwhile, UBS upgraded Indus Towers to 'Buy' with a target of ₹425, citing strong dividend potential linked to Vodafone Idea's network expansion.
CLSA has raised its target for Persistent Systems to ₹8,462 per share, citing multiple growth drivers and improved margin forecasts, while Citi maintains a 'Buy' rating on Indus Towers with a target of ₹485 per share, anticipating significant dividends following Vodafone's stake sale. Additionally, Juniper Hotels has been initiated with a 'Buy' call and a target of ₹430 per share, benefiting from strong hotel demand growth in India.
Financial stocks are poised to influence the market rally, with particular attention on Indus Towers and Bharat Forge. Investors are keen to see how these companies will perform and their potential impact on broader market trends.
Vodafone Group Plc plans to sell its remaining 3% stake in Indus Towers, amounting to 7.92 crore shares, to raise funds for repaying $101 million in outstanding dues. The stake sale, estimated between Rs 2,716.9 crore and Rs 2,835.8 crore at an offer price of Rs 343-358 per share, involves units Omega Telecom Holding and Usha Martin Telematics. Additionally, Indus Towers has released a pledge on 3.003% of shares held by Vodafone promoters to facilitate this transaction.
Axis Capital has initiated coverage on Indus Towers with an 'Add' rating and a target price of Rs 356, anticipating a 7% upside due to improved rental revenue growth from Vodafone Idea's network expansion and Bharti Airtel's 5G transition. The Supreme Court's ruling allowing telecom companies to claim Cenvat credits is expected to reduce Indus Towers' contingent liability by Rs 3,704 crore. Currently, shares are trading at Rs 332, reflecting a 63% year-to-date gain, outperforming the Nifty 50's 7% increase.
Indus Towers reported better-than-expected financials for 2QFY25, driven by a significant reversal of bad debt provisions totaling INR10.8 billion. However, core operational performance fell short, with recurring EBITDA at INR37.9 billion, slightly below estimates due to lower tower net additions and energy spreads. The company added 3.7k towers, below the expected 5.5k, and experienced a 19% QoQ decline in capex, while robust free cash flow of ~INR33 billion was noted, primarily used for a recent buyback. A DCF-based target price of INR385 has been set, maintaining a Neutral rating on the stock.
Indus Towers reported a 71% year-on-year increase in consolidated net profit, reaching Rs 2,223.5 crore for the September quarter, driven by consistent dues recovery from Vodafone Idea and full rent collection from service providers. The company's strong operational performance positions it to capture significant market share as Vodafone Idea and BSNL ramp up their 4G network rollouts, with expectations of continued growth in the near to medium term.
ICICI Securities has maintained a SELL rating on Indus Towers, setting a target price of INR 280, up from INR 270, due to stable net tenancy additions and strong cash collections. Despite positive indicators from VIL/BSNL rollouts and rising 5G demand, the risk-reward remains unfavorable.
Bajaj Finance, Indus Towers, Paytm, Sonata Software, RITES, Persistent, and Olectra Greentech are set to be in focus in today's stock market. Key developments include significant investments, major deals, quarterly earnings, fundraising efforts, and new appointments.
Indus Towers reported a consolidated net profit of Rs 2,223.5 crore for Q2, a 71% increase from Rs 1,294.7 crore year-on-year, driven by higher tenancies and record tower additions. Revenue from operations rose 4.66% to Rs 7,465.3 crore, while EBITDA surged 41.3% to Rs 5,021 crore, with margins expanding to 67.3%.
Indus Towers Limited
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