The street is now getting increasingly hopeful of a big dividend announcement from Indus Towers Ltd. after a marked improvement in its financial performance from the December quarter.

The company’s profits and margins saw a jump compared to the same quarter last year due to the reversal of doubtful debts from Vodafone Idea to the tune of ₹3,024.1 crore.

Indus Towers’ margin improved to 92.7% at the end of the December quarter from 50.3% during the same quarter last year. Net profit also crossed ₹4,000 crore for the December quarter from ₹1,540 crore in the base period.

Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) improved by 4% on a sequential basis.

Tower addition at the end of the December quarter stood at 7,583 from 4,308 in the previous quarter.

Brokerage firm Citi maintained its “buy” rating on Indus Towers with a price target of ₹485, citing three key positives from the quarter, which included better tenancies, recovery of dues and a higher free cash flow.

Citi said that free cash flow during the quarter stood at ₹2,700 crore, which it expects to be similar, if not higher in the March quarter as well.

“This implies a free cash flow of ₹20 per share for the second half of financial year 2025, which could be entirely paid out as dividend,” the brokerage write in its note.

Indus Towers carried out a buyback of shares in 2024, two years after its final corporate action of an ₹11 per share interim dividend. The company had suspended dividend payouts in the past due to rising dues from Vodafone Idea, which had severely impacted its cash flow generation.

Out of the 24 analysts that have coverage on Indus Towers, 13 of them have a “buy” rating, six of them say “hold”, while five have a “sell” rating on the stock.

Shares of Indus Towers have surged to the day’s high on Friday, trading 1.6% higher at ₹372.3. The stock is still 20% below its recent peak of ₹460.