Shares of telecom infrastructure company Indus Towers Ltd gained more than 4 percent on Thursday after brokerage firm Macquarie initiated coverage on the stock with an outperform rating and projected a potential upside of 40 percent to the current market price.
The brokerage believes that Indus Towers has long-term potential and a 15 percent free cash flow (FCF) yield provides support to the company even as it faces near-term externalities. Macquarie has assigned a price target of Rs 200 on the stock.
Macquarie said that Indus Towers has a 9 percent dividend yield. A dividend yield reflects payouts of dividends each year relative to the company's stock price.
In a bull case scenario, Macquarie expects shares of Indus Towers to double, while a bear case scenario projects a downside of 20 percent. The base case envisages only a slow growth profile despite large infra opportunity, the brokerage clarified.
Indus Towers Ltd (formerly Bharti Infratel Ltd.) reported a 5 percent decline in consolidated revenues to Rs 6,753 crore for the March quarter over the year-ago period.
Consolidated EBITDA for the quarter declined by 15 percent to Rs 3,447 crore compared to the year-ago quarter.
The financial results reflected the stress on its receivables due to collection challenges faced from one of the major customers, the company had stated.
