- Indus Towers stock upgraded to Buy by DAM Capital with target price raised to Rs 402
- Bharti Airtel acquired shares worth Rs 250 crore recently, boosting investor confidence
- Dividends expected to resume from FY26 with forecast yields of 7-9% through FY28
Indus Towers Ltd. stock is poised for potential upside after domestic brokerage DAM Capital upgraded its rating and hiked its target price, citing four key catalysts.
The share price has declined by nearly 12% over the last six months, mainly due to no dividend payout in fiscal 2025, uncertain capex plans, uncertainty on revenues from Reliance Jio, and Vodafone Idea's sustainability concerns.
Now, analysts at DAM Capital said they believe dividends would now resume, capex in Africa will be small and not value destructive, Jio revenues would continue, and VI's sustainability concerns remain, but there are no near-term threats.
"After deciding not to return any cash to shareholders, we believe that dividends/buybacks would resume from FY26. Recent cash acquisition of shares worth Rs 250 crore by Bharti Airtel from the open market gives some comfort and as an upside risk, we believe that Indus may again choose the buyback route (instead of dividend) with no participation from the promoter," a note said.
The company last paid an interim dividend in May 2022. DAM Capital now forecasts a dividend yield of around 7-8% in FY26 and 9% for FY27-28.
Sunil Bharti Mittal-led Bharti Airtel owned a 50% stake as of June in Indus Towers, India's largest mobile tower installation company. The company became a subsidiary of Bharti Airtel following a buyback of shares in August 2024.
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Indus Towers Target Price
DAM Capital has upgraded the Indus Towers stock to 'Buy' and raised the target price to Rs 402 from Rs 395. The new target implies a potential upside of 15% over Thursday's closing.
Eleven out of the 23 analysts tracking Indus Towers have a 'buy' rating on the stock, and six each recommend a 'hold' and a 'sell', according to Bloomberg data. The average of 12-month analyst price target of Rs 405 implies a potential upside of 15%.
The stock trades at 9.6 times its price-to-earnings ratio.
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