Indus Towers shares extended gains for a third consecutive session, driven by positive developments concerning Vodafone Idea, including its debt raise and Adjusted Gross Revenue (AGR) dues relief. According to latest reports, the stock traded around ₹438.55 on February 4, 2026, reflecting a significant recovery from its 52-week low of ₹312.55. The rally is fueled by optimism around Vodafone Idea's aggressive three-year investment strategy and the government's AGR relief package, both viewed favorably for the tower infrastructure provider. Citi highlighted that the successful completion of Vodafone Idea's debt raise and a reassessment of its AGR dues are key inflection points that could enable shareholder returns.
Centrum Broking has maintained its Buy rating on Indus Towers Ltd. despite the company's mixed Q3 performance, according to reports from NDTV Profit. The brokerage's decision is driven by improving revenue visibility and steady tenancy-led growth, supported by rising data usage and ongoing 5G expansion. However, recent developments reveal a stark year-on-year decline in reported EBITDA, with figures dropping 36% year-on-year to ₹4,500 crore in Q3 FY26, accompanied by significant EBITDA margin compression falling to 55.34% from 92.71% in the previous year. While adjusted EBITDA showed a 13% year-on-year rise, the substantial drop in reported figures warrants close investor attention. The firm expects revenue/Ebitda/PAT to clock a CAGR of 9.3%/1.5%/11.2% over FY25-FY28E.
Q3 FY26 demonstrated sustained demand for telecom infrastructure with revenue increasing 7.94% year-on-year to ₹8,146.30 crore. According to latest reports, tenancy additions were robust with net additions at 6,105 during the quarter, up from 4,505 in the prior quarter, largely driven by Vodafone Idea. Free cash flow saw a substantial increase, rising from ₹300 crore to ₹800 crore quarter-on-quarter, contributing to a nine-month cumulative free cash flow of ₹2,600 crore. The company holds a net cash position of ₹3,400 crore on its balance sheet, providing strong financial flexibility for future growth initiatives.
Centrum Broking has rolled over to March 2028E and maintains its Buy rating with a revised target price of ₹523 (versus ₹503 earlier) at a PE of 16.0x on March 2028E earnings per share. However, analyst sentiment shows divergence with 11 out of 23 analysts recommending a 'Buy', 6 a 'Hold', and 6 a 'Sell'. Price targets show significant disparity, with Citi having a target of ₹540 and CLSA ₹560, suggesting substantial upside potential. Conversely, other analyst reports indicate an average price target of ₹412.60, implying potential downside from current levels. This divergence suggests differing views on the sustainability of revenue growth versus the impact of margin normalization and customer concentration risk.
A crucial point of uncertainty remains the reinstatement of dividends, a decision the board is expected to revisit. Dividends have been withheld since 2022 due to payment delays from Vodafone Idea, and despite recent clarity on AGR issues, a definitive announcement is still awaited. The company declared zero dividend in the last fiscal year and for the current fiscal year to date. With a market capitalization around ₹1.16 lakh crore and P/E ratio hovering around 16.22x as of February 2, 2026, Indus Towers appears attractively valued compared to direct telecom operator peers like Bharti Airtel (44.73x), though within its historical trading range.
