Results: Indus Towers Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

The quarterly results for Indus Towers Limited (NSE:INDUSTOWER) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of ₹74b were in line with what the analysts predicted, Indus Towers surprised by delivering a statutory profit of ₹7.15 per share, a notable 14% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Indus Towers

Taking into account the latest results, the consensus forecast from Indus Towers' 13 analysts is for revenues of ₹310.9b in 2025. This reflects an okay 7.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.6% to ₹26.65. Before this earnings report, the analysts had been forecasting revenues of ₹310.0b and earnings per share (EPS) of ₹24.22 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The consensus price target rose 9.1% to ₹388, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Indus Towers at ₹530 per share, while the most bearish prices it at ₹220. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Indus Towers' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.0% per year. Even after the forecast slowdown in growth, it seems obvious that Indus Towers is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Indus Towers' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Indus Towers. Long-term earnings power is much more important than next year's profits. We have forecasts for Indus Towers going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Indus Towers that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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