Indus Towers Ltd., one of India’s leading telecom tower infrastructure providers, declared its quarterly financial results for the March quarter on Wednesday, April 30. However, investors and analysts were left waiting for an expected announcement regarding shareholder value enhancement—something that the company had previously hinted at.

Last week, Indus Towers notified the stock exchanges that its board would consider shareholder rewards in the form of a bonus share issue, share buyback, issuance of debentures, or dividend payouts. These proposals were widely anticipated as a way to return value to shareholders and sustain investor confidence.

However, no such announcement materialised during the official results disclosure.

Board Forms Committee to Explore Shareholder Options

In its exchange filing, Indus Towers clarified that “after detailed deliberations”, the board has formed a dedicated committee. This committee will evaluate all possible options for enhancing shareholder value and then make a suitable recommendation to the board for final approval.

This delay in decision-making disappointed many market participants who were hoping for an immediate announcement—especially 4 lakh retail shareholders, many of whom were expecting their first-ever bonus share allotment from the company.

Given the expectations built around this decision, this move is now being closely monitored.

Past Buyback and Dividend Expectations

Indus Towers had carried out a share buyback in 2024, marking its first buyback after 2016. That event set the buyback price at ₹465 per share, and the stock has not reached that level since. In fact, Indus Towers’ stock recently made a 52-week high of ₹460, but continues to trade below the buyback level, with Wednesday’s closing price at ₹406.5.

Amidst these developments, brokerages were expecting dividends in the range of ₹10 to ₹20 per share, especially after the company's largest customer, Vodafone Idea, had started clearing all pending dues—a long-standing overhang on Indus Towers’ balance sheet.

March Quarter Performance: Revenue Rises, Profit Falls

As for the company’s financial performance in Q4 FY2024-25, Indus Towers reported a 4% drop in net profit. This decline, as per the company, was largely due to an accounting change.

On the brighter side, revenue increased by 7.4% year-on-year to ₹7,727 crore. The revenue rise indicates healthy operational growth, possibly driven by better tenancy ratios, rental revenues, and overall telecom infrastructure demands.

Even with a slight dip in profits, these figures reflect a stabilizing financial foundation that could support future shareholder rewards.

Market Reaction and Stock Performance

Despite no clear bonus or dividend declaration, the Indus Towers stock ended 1% higher on April 30 at ₹406.5. This price increase could reflect investor optimism regarding future announcements, now left in the hands of the newly formed board committee.

Additionally, over the past month, the stock has gained 15%, showing resilience in a volatile market and growing investor confidence, possibly fueled by Vodafone Idea’s financial turnaround and Indus Towers’ improving fundamentals.

Vodafone Idea's Impact on Indus Towers' Financials

Vodafone Idea is a major client of Indus Towers, and its delayed payments had historically weighed on the tower company’s financials. But with Vodafone Idea now beginning to settle its dues, Indus Towers is in a stronger position to consider shareholder payouts.

The improving cash flow position has increased speculation around possible large dividend payouts or a second buyback within a span of 12 months.

What Lies Ahead for Indus Towers Shareholders

The formation of a special committee to study and recommend shareholder reward strategies is a move to ensure comprehensive evaluation of long-term financial impact. While this introduces a short-term delay, it could result in more structured and sustainable returns to shareholders.

Investors will be closely watching future filings, especially minutes from board meetings or official updates from the newly formed committee.

The potential outcomes include:

• A bonus issue, which would increase liquidity and attract new retail investors.

• A buyback, which would indicate the company believes its stock is undervalued.

• A generous dividend, which would signal financial strength and reward loyal shareholders.

Conclusion: Delay Today, But Bigger Rewards Tomorrow?

Although Indus Towers refrained from immediately announcing a shareholder reward mechanism, the formation of a dedicated committee shows that the board is taking a prudent and analytical approach. The Q4 results show signs of financial health despite some accounting-based fluctuations.

For the retail investors—especially the 4 lakh small shareholders—the anticipation now shifts from the earnings release to the next board update.

The Upcoming IPOs in this week and coming weeks are Wagons Learning, Srigee DLM, Manoj Jewellers.

The Current active IPO are Kenrik Industries, Arunaya Organics.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.