Shares of Indus Towers, a prominent player in the telecom infrastructure sector, experienced a notable decline of over 7% on May 2. This downturn followed the release of their Q4 financial results, which revealed a nearly 4% decrease in consolidated profit after tax. The company reported a profit of ₹1,779 crore, down from ₹1,853 crore recorded in the same quarter last year.
Revenue Performance and Earnings Growth
Despite the dip in profit, Indus Towers showcased resilience in its revenue streams. The company’s revenue from operations surged by 7.4% year-on-year, reaching ₹7,727 crore, up from ₹7,193 crore in the previous year. Furthermore, the consolidated EBITDA for the quarter stood at ₹4,395 crore, marking a 7.1% increase compared to the previous year.
- Q4 Profit After Tax: ₹1,779 crore
- Revenue from Operations: ₹7,727 crore
- Consolidated EBITDA: ₹4,395 crore
Shareholder Expectations and Board Decisions
Investors were particularly focused on potential announcements regarding dividends, bonus shares, and buybacks. However, the board decided to postpone these discussions. The company stated, "The Board considered various avenues of enhancing returns to shareholders, including buybacks and dividends. After thorough discussions, a Committee was formed to evaluate all options and provide recommendations."
Annual Financial Overview
For the full financial year 2024-25 (FY25), Indus Towers reported a 5.3% increase in consolidated revenue, totaling ₹30,123 crore. The profit soared by 65% year-on-year, reaching ₹9,932 crore, and EBITDA rose by 41.9% to ₹20,845 crore.
Recent Stock Trends and Technical Insights
After the announcement of Q4 results, Indus Towers’ stock plummeted to a low of ₹378.80. As the stock market was closed on May 1, the market’s reaction was felt the following day. Nevertheless, it’s worth noting that despite the recent decline, the stock has seen a remarkable 11.08% increase over the past year and an impressive 150% growth over the last two years.
- Current Share Price: ₹391.60 (down 4% as of 10:10 AM)
- 52-Week High: ₹415
Rajesh Bhosale, a Technical Analyst at Angel One, commented, "The stock opened lower and faced selling pressure initially. A slight recovery was observed around the ₹380 level, which now serves as significant support. A drop below this level could lead the stock towards ₹360."
Investment Recommendations
According to analysts at ICICI Securities, the Q4FY25 performance was commendable, particularly due to an increase in tenancy additions. "The network rollout by VIL has positively impacted tenancy, which is expected to grow further. However, as tenancy sharing increases, we might see a slight dip in earnings," they noted. They have adjusted the target price for Indus Towers to ₹350, maintaining a ‘REDUCE’ rating.
Future Outlook
Anshul Jain, Head of Research at Lakshmishree Investments, provided insights into the stock’s technical position. He noted that the stock had previously broken out of a bullish pattern but lacked institutional support, raising concerns about its sustainability. "A strong defense above ₹395 is crucial for the stock to regain bullish momentum," Jain emphasized.
Investors are advised to monitor the developments closely, particularly regarding Indus Towers’ strategic moves to enhance shareholder value and its overall performance in the telecom market.
