Indus Towers: Buy or Hold? 3 Drivers Influencing Its Next Move

Shares of Indus Towers have dropped more than 10 percent in 2026, raising questions among investors about whether the stock has bottomed out or could decline further. Brokerages remain largely optimistic about the company following its June quarter results, but uncertainty over Reliance Jio’s tenancy renewal continues to weigh on sentiment.

Emkay Global Financial Services has revised its price target downward by 12 percent to Rs 475 from Rs 540, implying a potential upside of 24.3 percent from current levels. The brokerage pointed to a lack of visibility on the renewal of its contract with Reliance Jio as the primary reason for the target cut, even as it maintained a ‘Buy’ rating on the back of what it sees as attractive valuations and strong cash generation. Indus Towers reported Q1FY27 results generally in line with market expectations, with sustained tenancy additions and flat realisations leading to a 4.6 percent year-on-year growth in revenue. The EBITDA margin slipped by 140 basis points sequentially to 53.2 percent, primarily due to lower energy margin. Company management highlighted a strong order book and expressed confidence that tower additions would accelerate in upcoming quarters.

Emkay Global noted that while Vodafone Idea’s capital expenditure could potentially boost Indus Towers’ tenancy additions, the ongoing uncertainty around Reliance Jio’s contract renewal poses a risk that could affect up to 15 percent of the company’s revenue. Despite this, the brokerage highlighted that Indus Towers is trading at a discount compared to global peers.

Nomura took a similarly positive view, retaining its ‘Buy’ rating and price target of Rs 505, representing a potential upside of 32 percent. The brokerage noted that earnings were largely stable in the latest quarter, with rental per tenant coming in at Rs 41,082 per month - slightly ahead of estimates. EBITDA (excluding provisions) rose 1 percent quarter-on-quarter to Rs 4,540 crore, primarily driven by higher revenue per tenant and lower operating expenses even as energy losses increased. Nomura added that Indus Towers plans to start rolling out telecom towers in Nigeria, Uganda, and Zambia from the second quarter of FY27. Initial capital expenditure for the Africa expansion will be limited and funded largely by debt, though the company did not provide detailed capex guidance.

Motilal Oswal Financial Services described Indus Towers’ near-term risk-reward as balanced after the recent share price correction. The brokerage said that Vodafone Idea’s fundraising efforts and the status of Reliance Jio’s tenancy renewals remain critical factors to monitor. Delays in Vodafone Idea’s potential capital raise could suppress tenancy additions, while the firm is also factoring in 5,000 tenancy exits from Reliance Jio in the latter half of FY27, representing 10 percent of Jio’s total portfolio with Indus Towers.

In terms of recent performance, Indus Towers’ share price has gained 1.7 percent in the last five trading sessions, with little change over the past month. However, the stock is down almost 10 percent over the last six months, though it remains up 7.4 percent over the past year. As investors await clarity on major tenancy contracts and Vodafone Idea’s outlook, the next few quarters are set to be crucial for Indus Towers and its shareholders.