Sell Indus Towers, target price Rs 201: Religare Securities – ET Telecom

Latest News Tech News Technology

Religare Securities has sell call on Indus Towers with a target price of Rs 201. The current market price of Indus Towers Ltd. is Rs 260.15.

Indus Towers Ltd., incorporated in the year 2006, is a Large Cap company (having a market cap of Rs 70270.48 Crore) operating in Telecommunications sector.

For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 4141.60 Crore, up 131.56 % from last quarter Total Income of Rs 1788.60 Crore and up 145.87 % from last year same quarter Total Income of Rs 1684.50 Crore. Company reported net profit after tax of Rs 703.00 Crore in latest quarter.

Investment Rationale
Looking ahead, the brokerage expects the company’s revenue growth rate to slow down to 3% CAGR over FY20-24E. It expects co-locations to be added at run rate of 8,000/year, which will dilute its tenancy ratio to 1.8x. While it expects EBITDA and EPS to clock 3%/5% CAGR each over FY20-24E, it expects its EBITDA margin at 50% in FY24E. In light of decadal low tower tenancy ratio, no scope for further rise in rentals, likely client concentration risk, delay in tariff hike and launch of 4G/5G-enabled smart phones by Jio + Google, it initiates coverage on INDUS with SELL and a DCF-based 2-Year Target Price of Rs201 at implied valuation of 3.5x EV/EBITDA of FY24E.

Source link

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments