Synopsis: Indus reported sequential revenue and operating profit growth but delivered lower profit and compressed margins versus the year-ago quarter. Tower additions and co-location metrics improved, while lean-segment yields showed stress. Should you Buy, Sell Or Hold?
A telecom Infrastructure stock posted mixed operating trends and profitability shifts, with revenue inching higher sequentially but margins contracting year-on-year. Market focus is on tower additions, sharing metrics and free cash flow dynamics.
Indus Towers Ltd holds a market cap of Rs.101,516.50 crore. The stock opened at Rs.386, hit an intraday high of Rs.389.30 against a previous close of Rs.385.75, marking a rise of 0.92 percent from the previous close.
Financial Snapshot -Q2FY26
On a quarter-on-quarter basis, Indus posted a modest sequential improvement in topline and operating profit but delivered lower profit and margins versus the year-ago quarter.
Sales increased from Rs.8,058 crore to Rs.8,188 crore, a sequential rise of 1.61 percent. Operating profit rose from Rs.4,390 crore to Rs.4,572 crore, an increase of 4.15 percent. Operating margin improved from 54 percent to 56 percent, a sequential expansion of 3.70 percent on the margin base. PBT rose from Rs.2,334 crore to Rs.2,478 crore, up 6.17 percent. Net profit increased from Rs.1,737 crore to Rs.1,839 crore, a sequential rise of 5.87 percent. EPS moved from Rs.6.44 to Rs.6.83, up 6.06 percent.
On a year-on-year basis, revenue rose while operating profit, PBT, PAT and EPS declined, reflecting margin compression and lower profitability compared with the same quarter last year.
Sales rose from Rs.7,465 crore to Rs.8,188 crore, up 9.69 percent year-on-year. Operating profit declined from Rs.4,864 crore to Rs.4,572 crore, down 6.00 percent year-on-year. Operating margin fell from 65 percent to 56 percent, a contraction of 13.85 percent on the margin base. PBT decreased from Rs.2,980 crore to Rs.2,478 crore, down 16.85 percent. Net profit declined from Rs.2,224 crore to Rs.1,839 crore, a drop of 17.31 percent. EPS fell from Rs.8.25 to Rs.6.83, down 17.21 percent.
Operational Highlights
As of September 30, 2025, Indus’ macro tower base reached 256,074, reflecting a sequential addition of 4,301 towers from 251,773 and an annual rise of 26,416 from 229,658. Macro co-locations increased to 415,717, up 4,505 sequentially from 411,212 and up 36,481 year-on-year from 379,236.
The average sharing factor stayed at 1.63 during the quarter while the closing sharing factor was marginally lower at 1.62 versus 1.63 last quarter. Sharing revenue per tower per month rose 1.3 percent sequentially to Rs.67,924 from Rs.67,036 but was down 0.2 percent year-on-year from Rs.68,080. Sharing revenue per sharing operator per month improved 1.4 percent sequentially to Rs.41,714 from Rs.41,132 and recorded 1.4 percent growth year-on-year from Rs.41,125.
In the lean tower segment, co-locations increased to 13,963, up 28 sequentially from 13,935 and up 2,603 from 11,360 a year earlier. However, lean sharing revenue per sharing operator per month declined 1.4 percent sequentially to Rs.16,127 from Rs.16,362 and was down 1.8 percent year-on-year from Rs.16,431.
Towers and co-locations include assets acquired from Bharti Airtel Ltd comprising 10,380 macro towers and 2,226 lean co-locations recognized in the quarter ended March 31, 2025, with earlier closing differences adjusted in the June 2025 quarter.
Analyst View
Citi maintains a Buy rating and has raised the target price to Rs.500 from Rs.460. From the previous close of Rs.385.75, the implied potential upside to the Rs.500 target is approximately 29.62 percent. The brokerage termed Q2 as a mixed quarter but noted that the improving financial position of Vodafone Idea (Vi) enhances the company’s outlook.
While free cash flow declined sequentially, the cash reserves remain strong. Citi also stated that Indus’ planned Africa expansion will be organic and funded through debt, and believes that investor concerns around delayed shareholder payouts, Vi’s sustainability, and Bharti Airtel’s slower tower rollouts have been exaggerated.
About the Company
Indus Towers Limited is India’s leading passive telecom infrastructure provider, deploying, owning and managing telecom towers and communication structures for multiple mobile operators across all 22 telecom circles. With a portfolio of 256,074 telecom towers, Indus is one of the country’s largest tower companies and serves all wireless telecommunication service providers in India while being an industry early-adopter of green energy initiatives in operations.
-Manan Gangwar
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