Indus Towers Share Price: Indus Towers shares rally 6% after Citi recommends buying the dip, gives Rs 500 target price

Citi stated that the amount of past dues that VI repays to Indus in Q2 FY25 should ideally rise quarter-on-quarter, given the tariff hikes. The firm also recommends using any weakness in the share price as an enhanced buying opportunity, citing an attractive dividend yield of 6-7%.

Last week, global brokerage firm BofA set a target price of Rs 450 for the stock. In its comments on the AGR decision, the firm noted that there is no direct impact on Indus, but a derivative effect may occur, with no expected impact on tenancy growth. However, a multiple de-rating is likely. There is only a low possibility of a lump-sum payment or any special dividend at this time.

On September 19, the stock fell by 14% during the intraday session following the Supreme Court’s ruling in the Adjusted Gross Revenue (AGR) case. The telecom companies had requested a re-computation, but the apex court reaffirmed its decision on the AGR ruling, maintaining the full amount of the AGR demand against the telecom companies.

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For Vi, the Supreme Court confirmed the AGR demand raised by the Department of Telecom in 2019, resulting in a burden of Rs 58,000 crore. With the addition of interest, this burden has now increased to Rs 70,320 crore as of the end of FY24.

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