This Fundamentally Strong Telecom company, which is in the business of setting up, operating, and maintaining wireless communication towers is trading at a discount of 41 percent from 52W high.
Price Movement
In Friday’s trading session, Indus Towers Limited stock was trading at 4.23 percent lower in the day’s trade. The stock has delivered a return of around 76.4 percent in the past year and has outperformed Nifty in the same period. The stock reiterated from the day’s high of Rs. 341.95 and was trading at Rs. 325.15 which is 4.23 percent down from the previous closing price of Rs. 1437.20 per share.
Recent Major Events
Indus Towers is in the news for several reasons. Recently, Vodafone PLC has sold around 18 percent stake in Indus Towers. They are one of our major customers, and Vodafone has successfully raised an amount through equity funding and announced its plan to raise debt. Based on these developments, Indus Towers remains confident of collecting past dues and participating in the network expansion of the customer which is mentioned by the management.
In the transcript, the management mentioned about receiving dues from Vodafone Idea. From, the last three quarters, they are receiving but are not sure about the timeline of the remaining dues as discussion is still ongoing.
Vodafone Group still holds equity shares through its indirect wholly-owned subsidiaries, namely Omega Telecom Holdings Pvt Ltd – 2.26 percent and Usha Martin Telematics Limited – 0.74 percent as of September 2024. During the quarter, these entities participated in the Buyback and their combined shareholding stands at around 3.003 percent of the total share capital of Indus Towers. Those shares are pledged in favor of Axis Trustee Services.
Indus Towers recently announced a Buyback of Rs. 465 per share dated August 27th, 2024 amounting to Rs. 2,640 crore consisting of 5.67 crore shares. From buyback, Bharti Airtel increased their promoter stake from 48.95 percent to 50.005 percent as of the September quarter which made Indus Towers a Bharti Airtel subsidiary after receiving CCI approval. With this, Airtel plans to increase its stake in Indus towers by purchasing shares from Vodafone. There were plans to merge data center business Nxtra with Indus but Airtel had said it would be unlikely to do the merger.
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Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 7,465 crore which increased by 4.66 percent year on year, from Rs. 7,132 crore in Q2FY24 and a 1.11 percent increase from Rs. 7,383 crore in Q1FY25. Their net profit increased by 71.73 percent year on year, from Rs. 1,295 crore in Q2FY24 to Rs. 2,224 crore in Q2FY25. Quarterly, the profits were up 15.47 percent from Rs. 1,926 crore.
The return on equity in FY24 stood at 25.07 percent increasing from 9.43 percent a year ago. The debt-to-equity ratio was 0.82 times in FY24 which is slightly improved from 0.9 in FY23. However, the return on capital employed has stood at 21.32 percent which has improved from 10.18 percent in FY23.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a major share of 53.01 percent stake in Indus Towers, Foreign Institutional Investors (FII) holding around 24.19 percent, Domestic Institutional investors (DII) standing at 16.99 percent, public holdings standing at 5.81 percent and others 0.01 percent.
About the company
Indus Towers Limited is a leading telecommunications infrastructure provider in India, which provides passive tower services for mobile network operators. They operate over 2,29,658 towers and 3,79,236 co-locations across all 22 telecom circles.
The company focuses on shared infrastructure solutions, enabling efficient communication while reducing operational costs for telecom operators.
Written by Santhosh S
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