Synopsis:
Indus Towers plunged sharply today after the company’s board approved expanding into international markets like Nigeria, Uganda, and Zambia, utilizing Bharti Airtel’s partnership in Africa.
The shares of this leading Bharti Airtel group stock are in focus after announcing expansion into three African regions; however, CLSA flagged downside risks, citing cash depletion issues and limited revenue potential. As of June 2025, Bharti Airtel holds a commanding 50 percent stake in the company.
With a market capitalization of Rs 85,497 crore, the shares of Indus Towers made a day low of Rs 312.55 per share, down by 5 percent from its previous day closing price of Rs 329.45 per share. In the last one year, the stock has corrected by over 28 percent.
Indus Towers has announced that its Board of Directors has given the green light for the company to expand into select international markets, kicking things off with Nigeria, Uganda, and Zambia.
This strategic move is all about tapping into the growth potential of emerging African markets, diversifying revenue sources, and building long-term value. With a solid financial foundation and a partnership with Bharti Airtel, the company is set to carve out a competitive edge.
As part of its larger strategy, Indus Towers will keep an eye out for opportunities in other African nations where Airtel has a presence. This expansion is in line with the Indian government’s vision to support Indian businesses in their global growth journey. However, necessary approvals are still pending for this expansion.
Analyst views on this announcement
Indus Towers hasn’t paid out dividends since May 2022, primarily due to delayed payments from its major client, Vodafone Idea. This situation has sparked concerns among investors that the company may be more inclined to invest in international growth rather than reward shareholders with dividends. There were expectations for a bonus, buyback, or both to be announced in May 2025, but the board meeting got postponed, which caused the stock price to drop.
CLSA continues to hold its “high conviction” outperform rating but has lowered its target price from Rs 595 to Rs 520, signalling an upside potential of 58 percent from its previous day closing price of Rs 329.45 per share.
They think the expansion into Africa might not significantly boost revenues, as the targeted countries, Nigeria, Uganda, and Zambia, have fewer than 500 towers compared to Airtel Africa’s total of 37,579 towers.
CLSA also anticipates that management will prioritize enhancing the company’s capital structure by reinstating substantial dividend payouts, labeling the ongoing delay in dividends as “unjustified.”
Written by Satyajeet Mukherjee
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