12/07/2024

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Indus Towers nears 52-week high as BoFA Securities double upgrades it to ‘buy’

Indus Towers nears 52-week high as BoFA Securities double upgrades it to ‘buy’

Indus Towers share price: Shares of Indus Towers in early trade on January 10 reached the day’s high of Rs 220.5, rising as much as 4 per cent. The spike in the telecom infra company’s stock came after BoFA Securities turned super bullish on the counter and double upgraded it to a ‘buy’ rating. Besides, the company has set the target for the stock at Rs 270 per share.

 

Over a year, the stock has underperformed the headline index, delivering a return to the tune of over 18 per cent.

The brokerage sees upside potential in the stock considering the tariff hike as well as the fundraising at VIL. Besides, the brokerage sees room for FY25E EV/EBITDA of 5X (vs. tower average of 12.5X) to result in a re-rating in the counter.

Additionally, the brokerage opines that steady tenancies as well as 5G loading will brighten the prospects of the company.

Earlier, JM Financial, in its January 3 report on the outlook for the sector, said that it expects net tenancy additions for Indus Towers to remain robust as Bharti continues its aggressive 5G rollout and rural expansion programme; hence, EBITDA is expected to rise 3.5 per cent QoQ in 3QFY24.

The consensus recommendation on the counter from 20 analysts is ‘hold’, as per the Trendlyne data.

The technical indicator RSI is trading in the mid-range. An RSI value above 50 suggests more buyers of the security in the market.

Indus Towers is a mid-cap company that is engaged in providing telecom tower infrastructure sharing for telecommunication services. The company deploys, owns, and manages telecom tower communication structures for various mobile operators.