Jefferies flagged the risk of elevated capex levels for Indus Towers due to higher growth and maintenance capex, impacting earnings growth and Free Cash Flow. Nearly 10% of the company’s towers installed during 2016–17 are due for renewal in the second half of 2026 and early 2027. This occurs amid a slowdown in industry-wide tower additions, potentially intensifying competition among tower operators.
The brokerage warned that Indus Towers may need to offer discounts to retain key clients such as Bharti Airtel and Vodafone Idea. Limited concessions to a single tenant could have a cascading impact across the tenant base, affecting revenues. Despite a nearly 30% drop in tower additions during the first nine months of FY26, overall capital expenditure rose significantly due to higher maintenance costs and investments in energy infrastructure.
Jefferies expects annual capital expenditure to remain between Rs 72,000 crore-Rs 80,000 crore from FY26 to FY29, which could constrain free cash flow generation and limit dividend payouts. The brokerage estimates free cash flow at Rs 15–Rs 19 per share over FY27–FY29. Jefferies projects a revenue CAGR of 4% and earnings growth of 3% between FY26 and FY29.
