Stock Target: Telecom stock to buy now for an upside of 24%; Recommended by Citi

SYNOPSIS:
Citi remains bullish on Indus Towers after positive signals from the Telecom Minister on potential AGR relief for Vodafone Idea, reducing uncertainty around the support package and strengthening the outlook for Indus.

Shares of India’s leading provider of passive telecom infrastructure, which deploys, owns and manages telecom towers and communication structures for various mobile operators, are in focus on the stock exchanges, after global brokerage Citi showed optimism on the stock with a potential upside of around 24 percent.

At 9:51 a.m., shares of Indus Towers Limited were trading at Rs. 403.9 on Thursday, as compared to its previous closing price of Rs. 404.45, with a market cap of Rs. 1.06 lakh crores on BSE. The stock has delivered positive returns of around 13 percent in one year, and has gained by nearly 3 percent in the last one month.

Brokerage Target & Outlook

Global brokerage firm Citi has recommended a “high conviction buy” rating on Indus Towers Limited, assigning a target price of Rs. 500 per share, which implies a potential upside of around 24 percent from its previous close. Citi’s optimistic stance is largely driven by recent comments from Union Telecom Minister Jyotiraditya Scindia regarding potential AGR relief for the company’s key client, Vodafone Idea.

During an interview, the minister stated that the government is awaiting a formal request from Vodafone Idea before proceeding with any relief measures. He explained that the Department of Telecommunications (DoT) would make a recommendation after evaluating the company’s proposal, while emphasising that any decision must respect the legal boundaries established by the Supreme Court. “The judgment needs to be evaluated from the point of view of what can and cannot be done. We cannot cross the border of the SC judgement,” he noted.

According to reports, Scindia indicated that the government may complete its assessment and issue recommendations within the next couple of weeks, with the contours of a relief package likely to be finalised by year-end. The minister also described the Supreme Court’s recent ruling on additional adjusted gross revenue (AGR) dues as a positive development for Vodafone Idea.

Scindia reportedly highlighted that, excluding government-related dues, Vodafone Idea’s leverage is relatively low, and that AGR relief, combined with expected improvement in cash flows, should strengthen its ability to secure new debt financing. He also clarified that the Supreme Court’s ruling applies specifically to Vodafone Idea, and not to the broader industry.

Citi believes the minister’s remarks help reduce uncertainty around the timing and structure of the relief package, improving visibility for Vodafone Idea’s financial position. The brokerage noted that this clarity enhances the risk-reward profile for Indus Towers, creating what it views as a compelling buying opportunity for investors.

Financials & More

Indus Towers reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 10 percent, from Rs. 7,465 crores in Q2 FY25 to Rs. 8,188 crores in Q2 FY26. In contrast, the company’s net profit decreased during the same period, from Rs. 2,224 crores to Rs. 1,839 crores, reflecting a decline of more than 17 percent YoY.

Indus Towers Limited, India’s leading provider of passive telecom infrastructure, is engaged in the business of deploying, owning and managing telecom towers and communication structures for various mobile operators. Its portfolio of over 2,56,074 telecom towers makes it one of the largest tower infrastructure providers in the country, with a presence in all 22 telecom circles. Indus Towers caters to all wireless telecommunication service providers in India.

Written by Shivani Singh

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