Indus Towers shares were in focus on September 11 as global brokerage firm JPMorgan upgraded its rating and raised its target price by 47%, as per their latest note.

JPMorgan has raised its rating on the telecommunications infrastructure company to overweight from neutral earlier. The analyst hiked the target price on the Indus Tower stock to ₹500 from ₹340 earlier, implying a 17% upside from the closing price of September 10.

Indus Towers shares traded 1.5% higher at ₹431.80 at 9:30 am. The stock has made investors more than 110% wealthier so far this year (YTD) as against Nifty 50 which has risen 15% during the period.

Here are three reasons why JPMorgan has upgraded Indu Towers:
-The brokerage said it believes there will be better prospects from Vodafone Idea in terms of capex and tower/tenancies rollout. And, that it says, should drive low double-digit revenue and earnings before interest, taxes, depreciation, and amortisation or EBITDA growth over FY25-27.

-It added that Vodafone Idea has also been able to further repay past dues with the amount outstanding now reduced to ₹46 billion. The confidence of recovery of remaining dues is high and that should drive regular dividend payments from at least FY26 onwards.

-JPMorgan believes Indus Towers’ EBITDA and earnings per share (EPS) are likely to grow at 11% and 17%, respectively, over CFY24-27, which implies its valuation appears to be an undemanding growth when compared with Bharti Airtel and Bharti Hexacom.

On JPMorgan’s list, Bharti Hexacom with an overweight rating is its top pick, followed by Indus Towers and Bharti Airtel with the same rating, and last is Vodafone Idea on which it has an underweight stance.

Earlier this month, Goldman Sachs had downgraded the tower company to “sell” from its earlier rating of “neutral”. However, it raised its price target on the stock to ₹350 from ₹220 earlier.

Goldman Sachs wrote in its note that there has been a significant improvement in the fundamentals of Indus Towers and hence it has raised its EBITDA (earnings before interest, tax, depreciation and amortisation) estimates for the company by 17%. However, it added that while there is merit for Indus Towers to get a higher multiple compared to historical trends, the re-rating is “overdone”.