2 weeks Ago
Indus Towers shares have been on an uptrend for the last five straight sessions, and the telecom stock is expected to remain in focus during Tuesday's trading. This is due to the GoI raising its stake in Vodafone Idea from 22.60% to 48.
99%, converting ₹ 36,950 crore AGR dues into fresh equity. The market believes the development will likely help the company recover ₹ 500 crore in dues and declare a dividend to reward its shareholders. According to stock market experts, this revival of Vodafone Idea can be a big boost for the beleaguered telecom company.
However, they believe its revival has positive implications for Indus Towers , which provides passive telecom infrastructure to leading operators, including Bharti Airtel, Reliance Jio, and Vodafone Idea. So, it becomes tricky whether one should buy Vodafone Idea shares, which have already ascended over 10% on Monday, or one should look at Indus Towers shares, which are expected to remain in focus during Tuesday deals. Vodafone Idea news Speaking on the benefit for Indus Towers after the revival of Vodafone Idea AGR dues, Sugandha Sachdeva, Founder of SS WealthStreet, said, "The outlook for Indus Towers has received a significant boost following the Government of India's decisive action regarding Vodafone Idea (Vi).
This revival has positive implications for Indus Towers, which provides passive telecom infrastructure to leading operators, including Bharti Airtel, Reliance Jio, and Vodafone Idea." "Vi is a major customer for Indus Towers. In Q4 FY25, Indus Towers reportedly recovered ₹ 500 crore of pending dues from Vodafone Idea, a boost that enhances its free cash flow.
With a 100% FCF payout policy, this recovery improves the likelihood of a healthy dividend announcement alongside its Q4 results," said Sugandha. She said that the government's intervention in stabilising Vodafone Idea significantly de-risks Indus Towers' exposure to its key client and unlocks potential future growth avenues from Vi's network investments. Indus Towers shares: What fundamentals signal Pointing towards the fundamentals of Indus Towers shares, Seema Srivastava, Senior Research Analyst at SMC Global Securities , said, "Despite these challenges, Indus Towers reported a remarkable 160% year-on-year net profit surge in Q3 FY25, reaching ₹ 4,003 crore, driven by robust additions to its tower and colocation portfolio, along with substantial collections from overdue payments, including from a major customer, widely presumed to be Vodafone Idea.
The company's operational revenue grew by 4.8% to ₹ 7,547 crore, while EBITDA soared by 93.2% to ₹ 6,997 crore, significantly boosting its EBITDA margin to 92.
7%, up from 50.3% in the previous year. These financial figures reflect Indus Towers' strong operational resilience and efficient management of its infrastructure assets.
" "Buzz about Vodafone Idea's ₹ 500 crore payment to Indus Towers, while positive, only covers a small portion of its outstanding dues. This partial payment is a positive sign of Vodafone Idea's intent to clear its dues. Still, the remaining unpaid amounts and ongoing financial challenges present risks to Indus Towers' future revenue stability," the SMC expert said.
In terms of risk factors involved in Indus Towers' sales due to Vodafone Idea's financial burden, Seema Srivastava said, "For investors, Indus Towers' strong financial performance is attractive, but the uncertainty surrounding Vodafone Idea's ability to clear its remaining debts calls for caution. While Indus Towers displays strong fundamentals, the financial interdependence between the two companies adds a layer of risk that requires careful assessment before making investment decisions." Vodafone Idea shares: Will the rally continue On fundamental changes expected after GoI bailing out Vodafone Idea from the AGR dues, Sugandha Sachdeva of SS WealthStreet said, “The government has converted outstanding dues into equity, increasing its stake in Vi from 22.
6% to nearly 49% (valuing the conversion around Rs.36,950 crore). This move is a crucial lifeline for the financially stressed telecom operator and is expected to substantially ease VIL's cash flow burden over the next three years.
” "This restructuring will provide Vi with substantial cash flow relief over the next three years. The relief will likely aid Vi in settling past debts and, potentially, secure new funding for its much-needed 4G network expansion and initial 5G rollouts in key markets. This addresses a major overhang on Vi's operational capabilities," Sugandha added.
Vodafone Idea vs Indus Towers: Which stock should you buy? Speaking on the outlook of Vodafone Idea shares, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “Vodafone Idea forming a bullish rectangle on the daily chart, with a recent high-volume bar hinting at a potential breakout. For the breakout to sustain, the stock must close above ₹ 8.40.
A sustained move beyond this level could lead to a test of ₹ 10.50, the logical target. However, significant supply on the left side of the chart may act as a hurdle, potentially capping the upside.
Bulls need strong follow-through to overcome resistance and confirm momentum .” On the outlook of Indus Towers shares, Anshul Jain said, “Indus Towers share price has broken out of a bullish 134-day rounding bottom pattern at ₹ 400, but the breakout lacks volume, making it a risky runaway breakout. A close below ₹ 390 would invalidate the setup.
However, if the stock sustains above ₹ 406, a rally toward ₹ 430 remains highly probable. Traders should stay cautious and look for volume confirmation on follow-through days to gauge the move's strength and avoid potential whipsaws.” Disclaimer: The views and recommendations given in this article are those of individual analysts.
These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions..
