Brokerage firm CLSA has issued a 'high conviction outperform' recommendation on Indus Towers Ltd. with a price target of ₹580 per share, representing a 32% upside potential from current levels. According to reports from CNBC TV18, this bullish stance comes despite the stock declining on Tuesday, May 26, with shares trading 1.2% lower on the day. The stock has shown positive momentum over the past month, gaining 8% in the last one month.
In financial year 2026, Indus Towers experienced significant tenancy expansion with 30,000 to 40,000 new tenancies, as reported by CLSA. The growth was primarily driven by two major telecom operators - Bharti Airtel and Vodafone Idea, which collectively contributed around 20,000 of these new tenancies. Looking ahead, CLSA expects substantial growth over the financial years 2026-2029, projecting cumulative tower additions of 36,000 and tenancy additions of 77,000.
According to CLSA analysis reported by CNBC TV18, long-term contracts for existing tenancies account for approximately 90% of the company's Earnings, Tax, Depreciation and Amortisation (EBITDA). These contracts feature potential for annual escalation, providing revenue stability. The brokerage notes that Indus Towers' high free cash flow should enable continued dividend payouts, with yields also having potential for upside. At 6 times its Enterprise Value to EBITDA, CLSA considers the valuations of Indus Towers to be attractive.
As reported by CNBC TV18, among the 24 analysts covering Indus Towers, 11 have a 'buy' rating, 6 have a 'hold' rating, and 7 have a 'sell' rating. The stock's performance reflects mixed sentiment in the market. CLSA projects that if Indus Towers successfully retains or expands its market share in the telecom tower segment, it could achieve tenancy additions between 1.01 lakh to 1.23 lakh, significantly exceeding current projections.
