Telecommunication stock surged over 4.5% today in intraday, giving a bullish closing above its previous week’s high. Now trading at ₹283, this stock has gained nearly 110% from its 52-week low of ₹135. The company also outperformed benchmark index and generated decent gains in the short term for investors
Indus Towers Ltd (NSE: INDUSTOWER)
Based in New Delhi, Indus Tower Ltd was founded in 2005 and it is one of the largest telecom tower companies in India. Companies like Vodafone Group, and Airtel have stakes in this telecom company. The company earns profits by strategically acquiring land and installing mobile towers. Then these towers are rented by INDUSTOWER to other mobile operators like Jio, Vi, etc.
Last ten years were very hard for Indus Tower where its shares were on a continuous decline. Its stock price fell by almost 70%. In August 2015, the company marked an all time high of ₹499.65, but later it never went past this level. With each new year, the company kept on making lower lows. However now, it looks like this telecom giant is finally making a comeback.
Financial performance improved for Indus Tower
Shares of Indus Towers have outperformed in financial year 2024. This year, the company reported highest annual sales in the last 10 years (2.4% growth compared to 2023) (source – Industower Moneyconrol). Their quarterly sales are also rising by 6.4% increment YoY.
Year 2023 was turn around for Indus Tower, as they posted positive net profits of 1540 crores in Q4 of 2023. A year back, they were in loss of -708 crores, meaning from 2022 to 2023, Indus Tower’s net profits grew by almost 2.5 times!
Indus Tower might be still attractive to investors with its high EBITDA margins of 36% and consistently high Return on capital employed (ROCE). Foreign institutional investors hold nearly 20% stakes in the company which shows institutional bullishness in the company.
Now INDUSTOWER is trading near breakout level supported by rising Relative strength (RSI). If the RSI keeps trending upside (above 70) we can expect the bullish move to further continue.
Short term Targets for Indus Tower
| Target | Price (INR) |
|---|---|
| Target 1 | ₹290.45 |
| Target 2 | ₹300 |
| Target 3 | ₹308 |
| Target 4 | ₹329 |
Indus Tower’s Long term swing targets
| Target | Price (INR) |
|---|---|
| Swing Target 1 | ₹308 |
| Swing Target 2 | ₹333 |
| Swing Target 3 | ₹371 |
Financial Statements
While we assess long term view of any company, it is important to study its financials. Below are quarterly financial statements for Indus Tower.
Quarterly result of Industower Mar 2023
| Particulars | Mar 2023 |
|---|---|
| Net Sales (Cr.) | 28,381.80 |
| Total Expenditure (Cr.) | 18,712.80 |
| Operating Profit (Cr.) | 9,669 |
| Other Income (Cr.) | 577.70 |
| Interest (Cr.) | 1,670.40 |
| Depreciation (Cr.) | 5,321.50 |
| Exceptional Items (Cr.) | -492.80 |
| Profit Before Tax (Cr.) | 2,762 |
| Tax (Cr.) | 718.70 |
| Net Profit (Cr.) | 2,043.30 |
| Adjusted EPS (Rs) | 7.58 |
Result Q1 2022
| Particulars | Mar 2022 |
|---|---|
| Net Sales (Cr.) | 27,708.20 |
| Total Expenditure (Cr.) | 12,937.60 |
| Operating Profit (Cr.) | 14,770.60 |
| Other Income (Cr.) | 576.20 |
| Interest (Cr.) | 1,602.20 |
| Depreciation (Cr.) | 5,320.30 |
| Exceptional Items (Cr.) | 0 |
| Profit Before Tax (Cr.) | 8,424.30 |
| Tax (Cr.) | 2,057.20 |
| Net Profit (Cr.) | 6,367.10 |
| Adjusted EPS (Rs) | 23.63 |
Conclusion
Indus Tower Ltd has finally broken above its trending resistance of ₹270 and the momentum is on rise. This telecom company has displayed impecabble performance this year, and if things play out well, we can expect this growth to continue in Indus Towers.
