Shares of Indus Towers Ltd. were trading with gains of as much as 3% on Tuesday, November 19.

Global brokerage firm Citi has maintained a ‘Buy’ recommendation on the stock, with a price target of ₹485 per share. The price target implies a potential upside of over 50% from Monday’s closing levels.

Indus Tower’s stock has corrected by 28% since announcing its share buyback on July 30.

Despite this decline, Citi’s research note highlights that several positive developments have been largely ignored:

1) A likely increase in tenancies from Vodafone Idea starting Q3 FY25E;

2) Faster recovery of overdue payments from Vodafone Idea;

3) Reduced capital expenditure supporting free cash flow generation;

4) Improving visibility of dividend reinstatement by Q4 FY25E.

Indus Towers Ltd. had approved a buyback of its equity shares along with its June quarter results.

The company had approved to buyback up to 5.67 crore equity shares or 2.1% of the total equity shares in the paid-up share capital of the company for a total buyback consideration of ₹2,640 crore.

This was the first share buyback from Indus Towers in eight years. The last instance of the company approving a buyback was back in 2016, when it was known as Bharti Infratel.

Shares of Indus Towers are trading 2.27% higher on Tuesday at 330.50. The stock has risen nearly 63% so far this year and gained 72% in the last one year.