Indus Towers Ltd
NSE:INDUSTOWER
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Intrinsic Value
The intrinsic value of one INDUSTOWER stock under the Base Case scenario is 363.42 INR. Compared to the current market price of 316.5 INR, Indus Towers Ltd is Undervalued by 13%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
Valuation Backtest
Indus Towers Ltd
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Fundamental Analysis
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Indus Towers Ltd. stands as a pivotal player in India’s rapidly evolving telecommunications landscape, operating as one of the largest tower infrastructure providers in the country. Established in 2007, the company has successfully carved out a significant niche by offering robust, shared tower solutions to telecom operators. This model not only enhances operational efficiency for service providers but also promotes cost savings and reduced environmental impact, making it an attractive choice in a fiercely competitive sector. With a portfolio encompassing over 180,000 towers across India, Indus Towers facilitates seamless connectivity for millions, effectively supporting the growing demand f...
Indus Towers Ltd. stands as a pivotal player in India’s rapidly evolving telecommunications landscape, operating as one of the largest tower infrastructure providers in the country. Established in 2007, the company has successfully carved out a significant niche by offering robust, shared tower solutions to telecom operators. This model not only enhances operational efficiency for service providers but also promotes cost savings and reduced environmental impact, making it an attractive choice in a fiercely competitive sector. With a portfolio encompassing over 180,000 towers across India, Indus Towers facilitates seamless connectivity for millions, effectively supporting the growing demand for data and voice services driven by the advent of 4G and burgeoning 5G technologies.
Investors looking at Indus Towers should note its strategic positioning amid a digital revolution, as increased smartphone penetration and demand for high-speed internet fuel the telecom industry’s growth. The company’s business model thrives on long-term contracts with major telecommunications providers, creating a resilient revenue stream. Furthermore, as the organization continues to invest in infrastructure upgrades and technological advancements, it stands to benefit significantly from the government’s push for digital infrastructure development. With a commitment to sustainability and operational efficiency, Indus Towers Ltd. not only represents a strong investment opportunity in a pivotal industry but also aligns well with the global movement towards responsible and sustainable business practices.
Indus Towers Ltd. is one of the largest telecom tower companies in India and operates primarily in the telecommunications infrastructure sector. Its core business segments can generally be classified as follows:
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Tower Leasing Services:
- This is the primary business segment of Indus Towers, where the company leases telecom tower space to various telecom operators. Indus Towers provides both passive infrastructure—such as towers, and space for antennas and equipment—contributing to reduced capital expenditure (CapEx) for telecom players.
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Infrastructure Maintenance Services:
- Indus Towers offers maintenance services for the telecom infrastructure it manages. This includes regular maintenance of towers, ensuring equipment functionality, and managing power-related services, thereby minimizing operational downtime.
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Energy Solutions:
- The company has ventured into providing energy solutions aimed at enhancing operational efficiency and reducing the carbon footprint of telecom infrastructure. This includes using renewable energy sources and optimizing power consumption for tower operations.
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Smart City Solutions:
- As cities evolve and require smarter infrastructure, Indus Towers is also looking to invest in smart city projects. This may involve integrating telecom infrastructure with smart lighting, surveillance, and other urban management systems.
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New Technologies and Innovations:
- With the rollout of 5G and advancements in telecom technology, Indus Towers is involved in adapting and upgrading its infrastructure to support new technologies. This includes working towards the deployment of small cells and other next-generation infrastructure solutions.
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Adjacent Services:
- Indus Towers may also explore business opportunities that are adjacent to its core offerings, including providing alternative solutions to meet the needs of emerging sectors like Internet of Things (IoT) and other connectivity solutions.
The company focuses on cost efficiency, sustainability, and innovation to maintain its competitive edge in the rapidly evolving telecommunications landscape.
Indus Towers Ltd has several unique competitive advantages that help it stand out in the telecommunications infrastructure sector:
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Market Leadership: Indus Towers is one of the largest telecom tower companies in India, which provides significant scale advantages. Its extensive network allows it to offer better coverage and reliability to customers.
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Strong Customer Base: The company has long-term relationships with major telecom operators, including companies like Bharti Airtel, Vodafone-Idea, and Reliance Jio. This entrenched customer base ensures a steady revenue stream.
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Collaborative Model: Indus Towers operates on a multi-tenant model where multiple operators share the same tower infrastructure. This reduces costs for telecom operators and enables Indus to maximize asset utilization, thereby enhancing profitability.
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Asset Light Business Model: By focusing on tower leasing rather than owning the telecom equipment, Indus Towers can maintain an asset-light model. This reduces capital expenditure and operational risk, allowing for better cash flow management.
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Technological Advancements: The company invests in advanced technologies and services, such as small cells and distributed antenna systems, to meet increasing demands for data and improve service quality, thereby addressing the evolving needs of telecom operators.
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Regulatory Compliance: Indus Towers is known for its compliance with government regulations, which can serve as a competitive advantage in a sector that often faces regulatory scrutiny.
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Cost Efficiency: Through economies of scale and operational efficiencies, Indus Towers can provide competitive pricing to telecom operators, making its services more attractive.
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Sustainability Practices: The company has made strides in incorporating sustainable practices, such as reducing energy consumption and using renewable energy, which can appeal to socially responsible investors and clients.
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Strategic Partnerships: Indus Towers often collaborates with technology providers and other stakeholders to enhance its service offerings and innovate in response to market challenges.
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Strong Financial Health: With robust financial metrics, the company is capable of investing in new technologies and expansion opportunities more readily than many of its competitors.
These advantages position Indus Towers Ltd favorably in the competitive landscape of telecom infrastructure, allowing it to respond effectively to the evolving demands of the telecommunications market.
Indus Towers Ltd, a leading provider of telecom tower infrastructure in India, may face several risks and challenges in the near future:
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Regulatory Challenges: The telecommunications sector is subject to extensive regulation by the government. Changes in regulations, such as spectrum allocation policies or taxation, could impact operational costs and profitability.
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Market Competition: The rapid expansion of 5G services has intensified competition among telecom operators. New entrants or aggressive strategies from existing competitors might affect Indus Towers' market share and pricing power.
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Debt Levels: High levels of debt among its major clients (telecom operators) could affect their financial stability, potentially leading to delayed payments and impacting cash flow for Indus Towers.
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Technological Advancements: The shift towards advanced technologies such as 5G requires significant investment in infrastructure. Delays in deployment or adoption of these technologies could hinder growth.
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Operational Risks: The company has a vast network of towers that requires constant maintenance. Any operational disruptions, whether due to natural disasters, technical failures, or labor issues, can pose risks to service continuity.
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Customer Concentration: A significant portion of revenues could be dependent on a limited number of customers. If any major client faces financial trouble or opts for shared infrastructure, it could affect revenue streams.
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Environmental and Social Liability: Increasing scrutiny on environmental impacts and community concerns over tower placements may lead to legal challenges or additional compliance costs.
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Slowdown in Telecom Sector Growth: Any slowdown in the overall demand for telecom services could affect the need for additional towers and infrastructure, impacting future growth prospects.
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Inflation and Cost Pressure: Rising costs associated with raw materials, maintenance, and labor may squeeze margins if not adequately managed or passed on to clients.
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Technological Disruptions: Emerging technologies such as satellite-based internet services can disrupt traditional telecom infrastructure models, posing a long-term risk to traditional tower operators.
Addressing these risks will require strategic planning, operational efficiency, and proactive engagement with stakeholders.
Revenue & Expenses Breakdown
Indus Towers Ltd
Balance Sheet Decomposition
Indus Towers Ltd
Current Assets | 109B |
Cash & Short-Term Investments | 47.6B |
Receivables | 56.3B |
Other Current Assets | 5.2B |
Non-Current Assets | 474.7B |
Long-Term Investments | 13.9B |
PP&E | 420.5B |
Intangibles | 432m |
Other Non-Current Assets | 39.9B |
Current Liabilities | 105.8B |
Accounts Payable | 23.9B |
Other Current Liabilities | 81.8B |
Non-Current Liabilities | 194B |
Long-Term Debt | 157.8B |
Other Non-Current Liabilities | 36.2B |
Earnings Waterfall
Indus Towers Ltd
Revenue
|
292.4B
INR
|
Cost of Revenue
|
-112.6B
INR
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Gross Profit
|
179.8B
INR
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Operating Expenses
|
-72.6B
INR
|
Operating Income
|
107.2B
INR
|
Other Expenses
|
-31.8B
INR
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Net Income
|
75.4B
INR
|
Free Cash Flow Analysis
Indus Towers Ltd
INR | |
Free Cash Flow | INR |
Indus Towers delivered a solid financial performance in Q2, with revenues reaching INR 74.7 billion, up 4.7% year-on-year. Core rental revenues grew by 8.5% to INR 47.1 billion, driven by increased tower co-locations. EBITDA surged 42% year-on-year to INR 49.1 billion, marking a 65.7% margin. Profit after tax skyrocketed 71.8% to INR 22.2 billion. The company successfully reduced diesel usage by 2% year-on-year and aims for significant growth in 5G infrastructure. With solid collections against overdue accounts and notable backlogs of INR 35 billion, the company is optimistic about maintaining momentum in the coming quarters.
What is Earnings Call?
INDUSTOWER Profitability Score
Profitability Due Diligence
Indus Towers Ltd's profitability score is 65/100. The higher the profitability score, the more profitable the company is.
Score
Indus Towers Ltd's profitability score is 65/100. The higher the profitability score, the more profitable the company is.
INDUSTOWER Solvency Score
Solvency Due Diligence
Indus Towers Ltd's solvency score is 69/100. The higher the solvency score, the more solvent the company is.
Score
Indus Towers Ltd's solvency score is 69/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
INDUSTOWER Price Targets Summary
Indus Towers Ltd
According to Wall Street analysts, the average 1-year price target for INDUSTOWER is 424.75 INR with a low forecast of 272.7 INR and a high forecast of 603.75 INR.
Dividends
Current shareholder yield for INDUSTOWER is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Profile
Country
Industry
Market Cap
Dividend Yield
Description
Indus Towers Ltd. engages in the provision of telecom tower infrastructure for telecommunication services. The company is headquartered in New Delhi, Delhi and currently employs 3,218 full-time employees. The company went IPO on 2012-12-28. The firm is a provider of tower and related infrastructure, and deploys, owns and manages telecom towers and communication structures for various mobile operators. The company provides access to their towers primarily to wireless telecommunications service providers on a shared basis, under long-term contracts. The Company’s portfolio consists of approximately 184,748 telecom towers, which includes 335,106 co-locations and is covering approximately 22 telecom circles in India. The services offered by the Company include tower, power, space, smart cities, tower operating centers (TOC) and green technology.
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IPO
Employees
Officers
The intrinsic value of one INDUSTOWER stock under the Base Case scenario is 363.42 INR.
Compared to the current market price of 316.5 INR, Indus Towers Ltd is Undervalued by 13%.