Indus Towers Limited (INDUSTOWER.NS): Comprehensive Stock Analysis Report | Scrolls

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Sep 12
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by KarNivesh | 12 September, 2025

Indus Towers Limited, India’s largest telecommunications infrastructure provider, has established itself as a key player in the country’s digital growth story. Formed in 2007 through a joint venture between Bharti Infratel, Vodafone Essar, and Idea Cellular, the company has built a massive presence with over 2.5 lakh towers and 4.1 lakh co-locations across all 22 telecom circles in India. This scale makes Indus Towers one of the biggest tower companies in the world.

Indus Towers Limited headquarters building in Chennai with visible company signage.

Business Model and Operations

Indus Towers follows a straightforward and reliable business model: leasing tower space to telecom operators. Its revenue streams include site rentals (₹40,000–₹50,000 per tower per month), equipment leasing, maintenance services, and co-location services. By enabling multiple tenants on a single tower, the company improves efficiency and utilization.

The merger of Bharti Infratel with Indus Towers in 2020 created a more powerful entity with significant operational synergies. Bharti Airtel currently holds a controlling stake of just over 50%, highlighting strong promoter backing.

Financial Performance

Indus Towers’ growth over the past five years has been impressive. Revenue jumped from ₹13,954 crores in 2021 to ₹30,123 crores in 2025, representing a robust CAGR of 21%. Net profit in FY2025 stood at ₹9,932 crores, up nearly 65% from the previous year. EBITDA also rose to ₹20,650 crores, maintaining healthy margins above 50%.

Earnings per share surged to ₹36.85 in FY2025 compared to ₹22.40 in FY2024, showing strong value creation for investors. However, the latest quarterly results (Q1 FY2026) presented some challenges. Revenue grew 9.1% to ₹8,058 crores, but EBITDA margins fell to 54.5% due to rising energy and maintenance costs. Net profit dropped 9.8% year-on-year to ₹1,737 crores.

Valuation and Strengths

On the valuation front, Indus Towers trades at a P/E ratio of 9.56x, well below the industry average of 12x, indicating attractive entry levels. With ROE of 30.6% and ROCE of 45.4%, the company demonstrates superior efficiency compared to peers. A debt-to-equity ratio of 0.65 and interest coverage of 8.08x further reinforce its financial stability.

Growth Drivers

Several factors fuel Indus Towers’ future prospects:

5G Expansion: The nationwide rollout of 5G networks will require more towers and denser coverage.
Tenancy Growth: An increase in shared usage of towers is expected as operators expand 4G and 5G.
International Entry: In September 2025, Indus Towers announced its entry into African markets—Nigeria, Uganda, and Zambia—leveraging Airtel Africa’s presence. This marks a big step in diversifying revenue sources.

Risks to Watch

Despite strengths, risks remain. Vodafone Idea’s financial stress poses uncertainty, as it is one of Indus’ largest clients. Rising energy costs and regulatory challenges could also pressure margins. Additionally, international expansion in Africa brings currency and compliance risks.

Stock Outlook

As of September 2025, Indus Towers trades at ₹353.25, within a volatile 52-week range of ₹312.60–₹460.35. Analysts remain optimistic, with Citi assigning a ₹460 target price, Kotak recommending ₹400, and Ambit projecting as high as ₹525.

Conclusion

Indus Towers stands out as a strong, undervalued player in India’s telecom infrastructure sector. With its dominant market share, robust financials, and upcoming 5G and international growth opportunities, the company offers a compelling case for long-term investors. While risks need monitoring, its role as a backbone of India’s digital ecosystem makes Indus Towers a resilient and promising investment opportunity.