Citi stated that the amount of past dues that VI repays to Indus in Q2 FY25 should ideally rise quarter-on-quarter, given the tariff hikes. The firm also recommends using any weakness in the share price as an enhanced buying opportunity, citing an attractive dividend yield of 6-7%.
Last week, global brokerage firm BofA set a target price of Rs 450 for the stock. In its comments on the AGR decision, the firm noted that there is no direct impact on Indus, but a derivative effect may occur, with no expected impact on tenancy growth. However, a multiple de-rating is likely. There is only a low possibility of a lump-sum payment or any special dividend at this time.
On September 19, the stock fell by 14% during the intraday session following the Supreme Court’s ruling in the Adjusted Gross Revenue (AGR) case. The telecom companies had requested a re-computation, but the apex court reaffirmed its decision on the AGR ruling, maintaining the full amount of the AGR demand against the telecom companies.
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For Vi, the Supreme Court confirmed the AGR demand raised by the Department of Telecom in 2019, resulting in a burden of Rs 58,000 crore. With the addition of interest, this burden has now increased to Rs 70,320 crore as of the end of FY24.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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