Citi has reaffirmed its high-conviction buy rating on Indus Towers with a target price of ₹500 per share, stating that recent comments by India’s Minister of Communications, Jyotiraditya Scindia, provide meaningful clarity on the government’s approach to Vodafone Idea’s (VI) long-pending AGR matter. The brokerage believes the minister’s remarks significantly reduce uncertainty around the timing and structure of relief measures, which in turn improves visibility for Indus Towers’ receivables and tenancy growth outlook.
Scindia said the framework for VI’s relief package is expected to be finalised within weeks, aiming for completion before year-end. He reiterated that the Supreme Court’s ruling applies solely to Vodafone Idea and clarified that, excluding government dues, VI’s leverage remains “very low,” enabling it to raise fresh debt once AGR-related reconciliation is completed. Citi said these comments bolster confidence that VI will regain financial flexibility, supporting both its network expansion and its ability to meet payment obligations to Indus Towers.
The brokerage highlighted that Indus stands to benefit directly from any stabilisation and revival at VI, given the potential for improved cash flows, increased tenancy additions and a more predictable pricing environment. Citi added that current valuations already reflect excessive pessimism, making this a compelling opportunity for investors ahead of policy clarity.
Disclaimer: The views and recommendations above are those of Citi. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
