Indus Towers Limited, one of the world’s largest telecom tower companies, is entering a structurally supportive phase driven by steady tenancy additions, improving customer liquidity, and a favorable technical setup. While year-on-year profitability appears distorted due to a high base effect from one-off items last year, underlying operational performance remains resilient. Revenue momentum continues to be supported by network rollouts and co-location growth, while recent government relief on AGR dues for a key tenant has meaningfully reduced receivables risk. With the stock confirming a bullish trend reversal and consolidating near higher levels, Geojit Investments sees scope for a measured upside over the next three to six months.

Company Overview: Backbone of India’s Telecom Infrastructure

Indus Towers Ltd., incorporated in 2006 and formed through the merger of Bharti Infratel and Indus Towers, operates one of the most extensive telecom tower portfolios globally. The company owns, installs, and manages telecom infrastructure across all 22 telecom circles in India, serving marquee clients including Bharti Airtel (along with Bharti Hexacom), Vodafone Idea, and Reliance Jio Infocomm.

Its business model is anchored in long-term tenancy contracts, stable cash flows, and scale-driven efficiencies, making it a critical enabler of India’s data-led digital expansion.

Revenue Growth Reflects Sustained Operator Demand

Indus Towers reported a 7.9% year-on-year increase in revenue to Rs. 8,146 cr in Q3FY26, underscoring steady operating momentum. Growth was supported by continued tower rollouts and healthy co-location additions, with net co-locations rising 9% YoY during the quarter.

The tenancy ratio stood at a stable 1.62, indicating that incremental demand from telecom operators remains intact despite sector-wide financial stress among select players.

Margins Normalize After High Base, Operational Efficiency Intact

EBITDA for Q3FY26 came in at Rs. 4,509 cr, translating into a margin of 55.3%. While margins declined on a YoY basis, the comparison is skewed by an exceptionally high base in the previous year.

Management expects margins to stabilize going forward as cost efficiencies, operating leverage, and digital transformation initiatives begin to offset near-term pressures.

PAT Decline Masks Underlying Stability

Reported PAT declined sharply by 55.6% YoY to Rs. 1,776 cr in Q3FY26, largely due to a one-time Rs. 3,024 cr provision reversal booked in Q3FY25.

Excluding this exceptional item, underlying profitability remains steady. Improved collections, tighter cost controls, and better tenant cash flows are expected to support earnings normalization over the medium term.

AGR Relief Emerges as a Structural Positive

Government relief on Adjusted Gross Revenue (AGR) dues for a key telecom customer represents a meaningful tailwind for Indus Towers. The measure is expected to enhance tenant liquidity, reduce receivables risk, and improve visibility on cash flows.

This development materially lowers balance-sheet stress and supports future tenancy growth, particularly as operators accelerate network investments in 5G and data capacity.

Valuation: Reasonable Premium for Stability and Scale

As per market consensus, Indus Towers is currently trading at a one-year forward P/E of 15x, modestly above its three-year average of 12x. The premium reflects improving sector sentiment, reduced counterparty risk, and the company’s dominant market position.

Strategic expansion into select African markets, combined with a sharp focus on operational excellence and digital transformation, positions Indus Towers for sustainable long-term value creation.

Technical View: Breakout Validated, Momentum Strengthens

The stock has delivered a decisive breakout above a long-term downward-sloping trendline, followed by a successful retest—confirming trend durability. Price action now suggests consolidation near higher levels, typically viewed as healthy digestion of gains rather than distribution.

Momentum indicators reinforce the bullish bias:

RSI remains firmly in the bullish zone and has turned upward after a brief pause, signaling renewed buying interest without signs of exhaustion.

MACD continues in positive territory, with the MACD line above the signal line and a gradually expanding histogram, confirming strengthening momentum.

Trading Strategy: Favorable Risk–Reward Setup

Geojit Investments recommends initiating long positions in the range of Rs. 435–446. A stop-loss is placed at Rs. 380, while the upside target is set at Rs. 550, implying a potential return of approximately 26%.

This setup offers a favorable risk–reward profile aligned with the prevailing bullish trend and improving fundamental visibility.

Financial Snapshot and Outlook

Conclusion: A Measured Bet on India’s Digital Backbone

Indus Towers stands at the intersection of improving sector fundamentals and technically validated momentum. While near-term earnings optics remain affected by base effects, the company’s core business metrics point to stability and gradual improvement. Reduced counterparty risk, sustained tenancy demand, and a confirmed bullish price structure make the stock an attractive medium-term opportunity for investors seeking exposure to India’s telecom infrastructure backbone.