Shares of Indus Towers were falling on Monday after the stock received a downgrade from a domestic brokerage, given a recent spurt in the telecom tower firm’s market value.

What Happened: Kotak Institutional Equities downgraded Indus Towers to “reduce”, suggesting it’s time “time for a breather” after a significant rise in the stock price.

Over the past six months, Indus Towers shares surged by over 100%, fuelled by improved collections, net tower additions and Vodafone Idea’s recent fundraise.

Vodafone Idea’s fundraise, including its ₹18,000 crore FPO, has been a significant positive for Indus Towers. It’s expected to help sustain collections at 100% and offers reassurance on the recovery of Vodafone Idea’s past dues, estimated at ₹7,000 crore.

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All Priced In: Despite these positives, Kotak Institutional Equities believes the recent surge has already priced in these benefits. Moreover, Vodafone Idea’s long-term revival hinges on government actions.

The brokerage slashed its target price on Indus Towers to ₹340 per share, indicating a potential downside of nearly 4% from the previous close.

Kotak also expressed concerns that Vodafone Idea’s long-term revival plans might face challenges from FY27-32.

Contrary Opinion: In contrast, on April 23, CLSA upgraded Indus Towers to “buy” and raised the target price to ₹450 from ₹335 per share.

CLSA believes Indus Towers could benefit significantly from Vodafone Idea’s fundraising and planned addition of around 48,000 sites for 4G and 5G technology.

The brokerage has revised its forecasts for CY2025 and CY2026, considering the addition of 24,000 extra tenancies, which is expected to boost CY26 EBITDA growth by 10% year-on-year.

CLSA also sees Vodafone Idea’s past dues settlement of ₹5,700 crore as potentially adding ₹21 per share to Indus Towers’ value.

Price Action: Indus Towers’ share price was down 1.49% at ₹348.05 in morning trade on Monday.

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