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Investing.com - CLSA has lowered its price target on Indus Towers Ltd (NSE:INDUSTOW) to INR520.00 from INR595.00 while maintaining a High-Conviction Outperform rating.
The adjustment follows Indus Towers’ board approval to expand into Africa, specifically targeting Nigeria, Uganda, and Zambia. This marks the company’s first international expansion initiative.
The expansion will build on Indus Towers’ existing relationship with Airtel Africa, which owns 2,157 towers out of its total 37,579 towers across the continent. CLSA notes that these three target countries account for fewer than 500 towers combined.
CLSA expressed concern that despite the anchor customer relationship with Airtel Africa , the planned revenue diversification is unlikely to be significant. The research firm had expected management to focus on improving Indus Towers’ capital structure through high dividend payouts.
While Indus Towers’ board remains committed to reinstating distributions, CLSA criticized what it called an "unjustified delay in dividends" as part of its rationale for the price target reduction.
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