Q4FY21 Result Update - Indus Towers - ICICI Direct

Indus Towers' Q4FY21 performance was driven by continued traction in tenancy addition and lower operating costs, depreciation, which led to beat at the PAT level. Revenues came in at Rs. 6492 crore, down 3.6% QoQ on a like to like basis, with core rental revenues at Rs. 4141 crore, down 4% QoQ. We highlight that Q3FY21 included exit penalty of Rs. 400.2 crore, which has come down to Rs. 181.6 crore in Q4. EBITDA came in at Rs. 3413 crore, down 3.9% QoQ on a like to like basis, with EBITDA margins at 52.6% (down 17 bps QoQ). PAT came in higher than estimates at Rs. 1364 crore (flattish QoQ on comparable basis), largely owing to lower depreciation (lower by Rs. 100 crore QoQ) due to a change in accounting policy post-merger.

Valuation & Outlook

The robust tenancy addition for second consecutive quarter is positive but sustainability ahead will be important. The key risk of VIL's survival continues to remain. Moreover, while opportunities in adjacent areas (viz. small cells/smart cities/in building solutions/active network sharing) exist, these may fructify only over the long term. We maintain HOLD rating with a target price of Rs. 245/share, implying 5.5x FY23E EV/EBITDA. We will closely monitor the developments of VIL fund raising and survival strategies, before changing our stance.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IndusTowers_Q4FY21.pdf

Shares of Indus Towers Ltd. was last trading in BSE at Rs.251.9 as compared to the previous close of Rs. 260.55. The total number of shares traded during the day was 379932 in over 5062 trades.

The stock hit an intraday high of Rs. 268.95 and intraday low of 250.1. The net turnover during the day was Rs. 97920120.

Source : Equity Bulls

Keywords