Shares of Indus Towers Ltd. fell the most in nearly 12 weeks after net profit fell and margin contracted in the first quarter of this fiscal.
Net profit at Rs 477.3 crore vs Rs 1,415.3 crore
Revenue at Rs 6,897.3 crore vs Rs 6,797 crore
Ebitda at Rs 2,414.7 crore vs Rs 3,585.4 crore.
Ebitda margin at 35% vs 51.98%.
The management of Indus Towers, according to a Motilal Oswal report, said Idea is delaying regular monthly payments, and proposes to pay only part of the due amount billed until Dec. 31, 2022. It intends to start paying the full amount from January 2023, along with its previous dues over January-July 2023.
Trade receivables, the report said, declined due to a Rs 1,230-crore provision for a doubtful debt. “Overall receivables have increased to around three months from the general credit period of one month, indicating a delayed payment of Rs 4,000 crore by Idea, which is not provisioned, apart from the provisioned Rs 1,230 crore.”
Other highlights from the Motilal Oswal report
Reiterates 'neutral' with a target price of Rs 215 apiece.
Consolidated revenue fell, while other expenses included Rs 1,230 crore towards doubtful debts due to weak liquidity position of Idea.
Firm says potential loss of a significant customer, due to its ability to continue as a going concern or failure to attract new customers, could have an adverse effect on its business.
Shares of Indus Towers fell 8.23% in intraday trade before closing with 5.88% losses—the worst day in nearly 12 weeks.
The trading volume was nearly five times the 30-day average, when markets closed. The stock moved below the 50-day simple moving average, indicating potential downward price momentum.
Of the 27 analysts tracking the company, 13 maintain a 'buy', 11 suggest a 'hold' and three recommend a 'sell', according to Bloomberg data. The 12-month consensus price target implies a 14% upside.
Since the company's Q1 results on Tuesday, Credit Suisse and Ambit Capital reiterated 'underperform' and 'sell' ratings, respectively.
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