Indus Towers (NSE:INDUSTOWER) - my company analysis and valuation (feedback appreciated!)

[michaela57]

Summary​

Indus Towers (NSE:INDUSTOWER) is the largest Indian cell tower company with a history of high ROCE with long term contracts and good visibility of cash flows. Indus had faced headwinds in the last ~2 years, with one of its 4 key Telco customers (Vodafone Idea) coming close to bankruptcy, which has led to differed payments, write-offs and a large provision in Indus’ balance sheet.

However, looking at the fundaments and competitive landscape, the stock seems to be trading below intrinsic value in the base case, while only slightly overvalued using pessimistic assumption:

https://preview.redd.it/jhktffd71cc...bp&s=2fba750621fa353a706adfa33b54511e6a46e470

Detailed analysis can be found in the link below, covering:

1. The Indian mobile and cell tower industry
2. Indus’ business model
3. The Vodafone Idea crisis
4. Indus’ management
5. Competitive advantages / moat
6. Runway / future growth potential
7. Risks
8. Valuation
9. Sources

https://opensourceinvestor.substack.com/p/indus-towers-a-bet-on-the-future

This is the first company deep-dive I've published, so looking for feedback and anything I might have missed!

 

[oilpaintermom]

@michaela57 Very detailed report! Amazing read.

 

[mccree79]

@michaela57 Hi,

I have been following your posts lately (on substack) & just wanted to ask you - is there a way I can help you somehow? It'd a great learning for me working with you, I can help you do research etc.

Let me know if something like this works?

 

[michaela57]

@mccree79 Hello! Thanks for the interest. Yup, you could either provide feedback on this article or let me know if there’s another company that’s interesting for a deep dive - i’m interested in companies that i can buy and hold forever, either in India or internationally. If there’s already a good write-up online, I wouldn’t redo it, but if none exists then would be interested in doing a similar deep dive.

 

[annettel]

@michaela57 amazing research and analysis man! Would love an opportunity to work with you. Definitely looking forward to more such reads.

 

[elpasoautotransport]

@michaela57 I think he meant more like collaborate or work together or for

 

[socraticmethod]

@mccree79 Count me in as well!

 

[tke129]

@michaela57 Well written my friend!

 

[taznq15]

@michaela57 Is it a monopoly?

 

[michaela57]

@taznq15 Nope, it has roughly 31% market share at the moment. There are 4 large tower players - see the full article in the link for details

 

[mmbeyer01]

@michaela57 This will work only if it closes above 182 this month and holds above 176 by the end Aug.

 

[thecodsterman]

@michaela57 Will prefer buying in 152-155 range. Nothing above that. Target 195, soft SL of 148.

 

[bonnie1202]

@michaela57 I have given this trade on 30 May if anybody's interested

https://in.tradingview.com/chart/INDUSTOWER/ndXnpFxM-INDUSTOWER-90-return-possible/