Indus Towers share price rises 7%; What is driving the rally?

Another factor that drove the rally was that the telecommunications infrastructure company expanded its portfolio by incorporating a substantial number of new towers.

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Global brokerage firm UBS has noted that the increase in tower net additions can be attributed to Bharti Airtel’s continuous efforts in expanding rural coverage. 

The agency anticipates that the company’s leadership will elaborate further on the status of payments and receivables from Vodafone-Idea Ltd, along with offering insights into the overall demand outlook for the fiscal year 2025. The expectation is that both Bharti’s rural expansion and the rollout of 5G should decelerate from the fiscal year 2025, according to UBS.

Meanwhile, on Tuesday, Vodafone Idea conveyed to the exchanges its intention to convene a board meeting on January 29 to deliberate upon and disclose its financial results for the December quarter.

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Preceding the release of Vodafone Idea’s results, Indus Towers Ltd., a company for which Vodafone Idea is a significant customer, stated in its quarterly results that Vodafone Idea’s planned fundraising initiatives have not materialized as of yet.

“The funding plan of the said customer (Vodafone Idea) has not materialised till date and the said customer has not made the committed payments about the outstanding amount due as of December 31, 2022,” Indus Towers wrote in its notes to account, as part of its earnings statement.

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The cumulative provisions for doubtful receivables related to Vodafone Idea stand at ₹5,699 crore, as reported by Indus Towers. This figure incorporates ₹5,308 crore from the fiscal year 2023. 

As of 11:30 am, shares of Indus Towers were experiencing a 7.4% increase, trading at ₹233.90 each on the NSE. The stock has shown a notable 15% gain year-to-date.

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Published: 24 Jan 2024, 04:14 PM IST