BofA Securities ‘double upgrades’ this stock, sees an upside of 29%

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₹270, up from the previous ₹148. According to Bank of America, this adjusted target suggests a potential upside of 29% from Tuesday's closing levels. It's noteworthy that this revised target stands as the highest among all price targets set by analysts for Indus Towers.

Also read: NCC stock gains nearly 10% on strong volumes, logs biggest intraday jump since August According to a note from BofA Securities, Indus Towers has encountered challenges such as rising receivables, a decline in Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA), reduced dividends, among other issues. Despite these setbacks, the firm anticipates a positive turnaround for the tower company from its current lower performance. Indus Towers is poised to reap ongoing advantages from Bharti Airtel's expansion of its 4G network into tier-2 and tier-3 cities.

Bank of America (BoFA) has upgraded its estimate for Indus Towers' Compounded Annual Growth Rate (CAGR) by 4% for the fiscal years 2024-2027. BoFA attributes this double upgrade to two primary catalysts. Firstly, there's the potential decrease in capital expenditure (capex) at the company, as reduced investments contribute to an improvement in its free cash flow.

Currently, capex constitutes 29% of the overall sales. Also read: Multibagger stock: Solar Industries shares zoomed 535% in last 3 years; will the rally continue? The second catalyst highlighted is the prospect of a special dividend if Vodafone Idea, a significant customer, reduces its provisions. The note points out that Vodafone Idea had faced delays in paying Indus Towers, resulting in receivables at one point reaching ₹5,500 crore.