The stock traded at ₹151.00 on November 14, 2025, down 0.66% from the previous close, reflecting cautious investor sentiment despite the strong quarterly performance. With a price-to-earnings ratio of 52x—significantly above the construction sector average of 35x—the valuation appears stretched relative to peers, though the company's generous 15.79% dividend yield provides some cushion for income-focused investors.
| Quarter | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 | Jun'24 | Mar'24 |
|---|---|---|---|---|---|---|---|
| Net Sales (₹ Cr) | 6,080.20 | 6,030.00 | 5,939.00 | 6,064.20 | 4,022.50 | 3,478.90 | 3,475.70 |
| QoQ Growth | +0.83% | +1.53% | -2.06% | +50.76% | +15.63% | +0.09% | — |
| Net Profit (₹ Cr) | 280.00 | 226.70 | 167.10 | 219.70 | 210.40 | 242.80 | 241.30 |
| QoQ Growth | +23.51% | +35.67% | -23.94% | +4.42% | -13.34% | +0.62% | — |
| Operating Margin (%) | 40.86% | 40.74% | 40.84% | 42.83% | 39.17% | 37.62% | 37.43% |
| PAT Margin (%) | 4.61% | 3.76% | 2.81% | 3.62% | 5.23% | 6.98% | 6.94% |
Financial Performance: Strong Topline, Compressed Margins
Altius Telecom's Q2 FY26 performance showcased impressive revenue momentum, with net sales advancing to ₹6,080.20 crores from ₹6,030.00 crores in Q1 FY26, representing a modest 0.83% sequential gain but a substantial 51.15% year-on-year surge. This growth trajectory reflects the trust's expanding telecom infrastructure portfolio and successful integration of recent acquisitions, particularly following the December 2024 period which witnessed a dramatic 50.76% quarter-on-quarter jump.
Operating profitability remained robust, with the operating margin (excluding other income) maintaining stability at 40.86% in Q2 FY26, marginally up from 40.74% in the previous quarter. The operating profit before depreciation, interest, and tax (excluding other income) reached ₹2,484.30 crores, demonstrating the trust's ability to generate consistent cash flows from its infrastructure assets. However, the PAT margin contracted to 4.61% from 3.76% in Q1 FY26, though this represents a sequential improvement, the metric has declined substantially from the 6.98% recorded in Q2 FY24.
The interest burden remains a critical pressure point, with interest costs for Q2 FY26 standing at ₹1,072.90 crores, representing a substantial 17.65% of revenues. Whilst this marked a marginal decline from ₹1,081.60 crores in Q1 FY26, the absolute magnitude continues to constrain bottom-line expansion. Depreciation charges of ₹1,178.20 crores further compressed profitability, though these non-cash expenses reflect the capital-intensive nature of infrastructure assets.
Operational Excellence: Capital Efficiency Concerns Persist
Altius Telecom's return on equity (ROE) of 6.72% over the assessment period significantly lags industry standards for infrastructure trusts, signalling challenges in converting shareholder capital into profitable returns. The return on capital employed (ROCE) of 6.49% similarly indicates modest capital efficiency, particularly concerning given the trust's substantial asset base of ₹58,934.70 crores in fixed assets as of March 2025.
The debt-to-equity ratio reached an elevated 3.88 times in H1 FY26, marking the highest level in the trust's recent history and reflecting aggressive leverage deployment to fund infrastructure expansion. Total long-term debt stood at ₹41,645.60 crores as of March 2025, up substantially from ₹28,250.30 crores a year earlier. This 47.44% year-on-year increase in debt outpaced the corresponding growth in shareholder funds, which expanded only 12.67% to ₹15,064.40 crores.
Leverage Alert: Debt Serviceability Under Pressure
The trust's debt-to-EBITDA ratio of 7.23 times significantly exceeds comfortable thresholds for infrastructure entities, typically benchmarked at 4-5 times. With EBIT-to-interest coverage at just 1.33 times, the margin of safety for debt servicing appears thin, leaving limited room for operational setbacks or interest rate increases. The operating profit-to-interest ratio improved to 2.32 times in Q2 FY26, but this remains modest given the capital-intensive nature of telecom infrastructure assets.
Operating cash flow generation remained robust, with annual cash flow from operations reaching ₹7,066.20 crores for FY25, the highest on record. This represents a healthy conversion of operating profits into cash, providing some comfort regarding the trust's ability to service its debt obligations. However, investing activities consumed ₹11,056.00 crores during FY25, necessitating significant financing inflows of ₹4,367.00 crores to maintain liquidity.
Industry Context: Telecom Infrastructure Demand Remains Robust
The Indian telecom infrastructure sector continues to benefit from structural tailwinds, including the ongoing 5G network rollout, increasing data consumption, and the proliferation of connected devices. Telecom operators' capital expenditure plans remain elevated, driving sustained demand for tower and fibre infrastructure assets. Altius Telecom, as a pure-play infrastructure trust, stands positioned to capitalise on these trends through its extensive portfolio of telecom towers and related assets.
The trust's revenue growth of 51.15% year-on-year in Q2 FY26 significantly outpaced the broader construction sector, which posted a negative 20.01% return over the past year. This outperformance reflects both organic growth from existing assets and inorganic expansion through strategic acquisitions. The December 2024 quarter's dramatic 50.76% sequential revenue jump suggests a major portfolio addition during that period, likely contributing to the elevated debt levels observed subsequently.
Sector Positioning: Market Leader with Scale Advantages
Altius Telecom maintains its position as the largest company in the construction sector by market capitalisation at ₹46,320 crores, providing significant scale advantages in negotiating with telecom operators and accessing capital markets. The trust's extensive asset base and established relationships with major telecom service providers create meaningful barriers to entry for potential competitors. However, the capital-intensive nature of the business necessitates continuous access to debt markets, making the trust vulnerable to interest rate fluctuations and credit market conditions.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield (%) |
|---|---|---|---|---|---|
| Altius Telecom | 51.84 | 3.28 | 6.72 | 3.53 | 15.79 |
| Larsen & Toubro | 34.31 | 5.43 | 13.88 | 0.70 | 0.85 |
| Rail Vikas | 57.69 | 6.85 | 16.89 | 0.32 | 0.54 |
| NBCC | 46.03 | 11.87 | 20.01 | -2.41 | 0.81 |
| IRB Infra. Devl. | 29.21 | 1.25 | 4.34 | 0.90 | 0.40 |
| Kalpataru Proj. | 25.77 | 3.04 | 10.52 | 0.53 | 0.73 |
Peer Comparison: Premium Valuation Despite Weaker Fundamentals
Altius Telecom trades at a P/E ratio of 51.84x, commanding a significant premium to the sector average of approximately 39x and substantially above established players like Larsen & Toubro (34.31x) and Kalpataru Projects (25.77x). This elevated valuation multiple appears difficult to justify given the trust's ROE of 6.72%, which trails every peer in the comparison group except IRB Infrastructure Development (4.34%).
The trust's price-to-book ratio of 3.28x sits at the lower end of the peer spectrum, with Rail Vikas (6.85x) and NBCC (11.87x) commanding substantially higher multiples. This relative discount on book value reflects investor concerns regarding the trust's elevated leverage and modest return on equity. However, Altius Telecom's exceptional dividend yield of 15.79% stands out dramatically, dwarfing the peer group average of less than 1% and providing a compelling income proposition for yield-seeking investors.
The debt-to-equity ratio of 3.53x represents the highest leverage amongst peers, with most competitors maintaining ratios below 1x. This aggressive capital structure amplifies both returns and risks, making the trust particularly sensitive to operating performance fluctuations and interest rate movements. The elevated leverage explains the compressed ROE relative to peers, as interest costs consume a substantial portion of operating profits.
Valuation Analysis: Attractive Entry Point Despite Premium Multiples?
At the current price of ₹151.00, Altius Telecom trades at an enterprise value-to-EBITDA multiple of 9.64x and an EV-to-capital employed ratio of 1.50x. The proprietary valuation assessment categorises the stock as "Very Attractive," suggesting the current price offers value relative to the trust's asset base and cash flow generation capabilities. The EV-to-sales multiple of 3.98x appears reasonable for a high-margin infrastructure business, though the elevated P/E ratio of 52x raises concerns about near-term earnings growth expectations.
The stock has traded in a relatively narrow 52-week range between ₹140.00 and ₹159.00, currently positioned 5.03% below the upper bound and 7.86% above the lower threshold. This compressed trading range reflects balanced investor sentiment, with neither euphoria nor panic dominating price action. The technical trend recently shifted to "Mildly Bullish" from "Bullish" on November 13, 2025, suggesting some near-term momentum consolidation.
The dividend yield of 15.79% represents a standout feature, with the trust having paid ₹3.00 per share (on a face value of ₹150) with an ex-dividend date of August 28, 2025. This translates to an annualised yield that significantly exceeds fixed-income alternatives and most equity investments, though investors must weigh this income stream against the underlying leverage risks and modest capital appreciation potential.
| Quarter | Promoter (%) | FII (%) | Mutual Funds (%) | Insurance (%) | Other DII (%) |
|---|---|---|---|---|---|
| Dec'23 | 75.00 | 0.00 | 0.81 | 0.13 | 19.45 |
| Sep'23 | 75.00 | 19.75 | 0.81 | 0.13 | -2.63 |
| Aug'23 | 17.54 | 19.50 | 0.81 | 0.13 | -7.82 |
| Jun'23 | 87.96 | 19.39 | 0.00 | 0.10 | -9.70 |
| Mar'23 | 16.52 | 19.39 | 0.00 | 0.10 | -9.70 |
Shareholding Pattern: Stable Promoter Base, Volatile Institutional Holdings
The shareholding structure reveals a stable promoter holding of 75.00% maintained consistently through December 2023 and September 2023, following dramatic fluctuations in earlier periods. BIF IV Jarvis India Pte. Ltd. maintains the entire promoter stake, providing strategic stability and long-term commitment to the trust's growth trajectory. The absence of promoter pledging (0.0%) eliminates concerns about forced selling or financial distress at the sponsor level.
Foreign institutional investor (FII) participation experienced significant volatility, plummeting from 19.75% in September 2023 to 0.00% by December 2023. This complete exit by foreign investors raises questions about international confidence in the trust's risk-return profile, potentially reflecting concerns about elevated leverage or modest return metrics. The withdrawal of FII capital coincided with a corresponding surge in other domestic institutional investor (DII) holdings, which jumped from negative 2.63% to 19.45%, suggesting a rotation from foreign to domestic institutional ownership.
Mutual fund holdings remained minimal at 0.81%, indicating limited participation by retail-focused institutional investors. Insurance company holdings similarly registered at just 0.13%, suggesting that traditional long-term institutional investors have largely avoided the stock. Total institutional holdings of 20.39% remain modest for a trust of this size, potentially limiting liquidity and contributing to price volatility.
| Period | Stock Return (%) | Sensex Return (%) | Alpha (%) |
|---|---|---|---|
| 1 Week | -0.66 | +1.15 | -1.81 |
| 1 Month | +1.68 | +2.61 | -0.93 |
| 3 Months | +2.37 | +4.44 | -2.07 |
| 6 Months | +2.03 | +3.50 | -1.47 |
| Year-to-Date | +0.67 | +7.72 | -7.05 |
| 1 Year | -3.82 | +8.50 | -12.32 |
| 2 Years | -0.33 | +29.63 | -29.96 |
Stock Performance: Consistent Underperformance Against Benchmark
Altius Telecom has delivered negative absolute returns of 3.82% over the past year, significantly underperforming the Sensex's 8.50% gain and generating negative alpha of 12.32 percentage points. This underperformance extends across virtually all time horizons, with the stock posting negative alpha over one week (-1.81%), one month (-0.93%), three months (-2.07%), six months (-1.47%), and year-to-date (-7.05%) periods.
The two-year performance reveals a marginal negative return of 0.33%, whilst the Sensex surged 29.63%, resulting in a substantial negative alpha of 29.96 percentage points. This persistent underperformance relative to the broader market suggests structural challenges in the business model or valuation framework that have prevented the stock from participating in the broader equity market rally.
Interestingly, the stock has outperformed the construction sector, which posted a negative 20.01% return over the past year. Altius Telecom's relative outperformance of 16.19 percentage points versus its sector peers reflects the defensive characteristics of telecom infrastructure assets and the trust's generous dividend distributions, which have cushioned total returns despite modest capital appreciation.
"The trust's exceptional 15.79% dividend yield provides compelling income, but persistent negative alpha and elevated leverage demand careful risk assessment."
Investment Thesis: Income Play with Elevated Risk Profile
The investment case for Altius Telecom rests primarily on its exceptional dividend yield of 15.79%, which provides substantial income generation for yield-oriented portfolios. The trust's stable cash flows from long-term telecom infrastructure contracts offer predictability, whilst the "Very Attractive" valuation grade suggests the current price offers value relative to underlying assets. The positive financial trend designation reflects improving quarterly metrics, particularly the 23.51% quarter-on-quarter profit growth in Q2 FY26.
However, several factors constrain the investment thesis. The elevated debt-to-equity ratio of 3.88x and weak EBIT-to-interest coverage of 1.33x create financial fragility, leaving limited margin for operational setbacks. The modest ROE of 6.72% indicates inefficient capital deployment, whilst persistent underperformance against the Sensex across all time horizons raises concerns about long-term wealth creation potential. The "Average" quality grade and "Mildly Bullish" technical trend suggest neither fundamental strength nor technical momentum strongly favour the stock.
Key Strengths
- Exceptional Dividend Yield: 15.79% yield significantly exceeds market alternatives and provides substantial income generation
- Strong Revenue Growth: 51.15% year-on-year topline expansion demonstrates robust demand for telecom infrastructure assets
- Stable Operating Margins: 40.86% operating margin (excluding other income) reflects pricing power and operational efficiency
- Market Leadership: Largest company in construction sector by market cap (₹46,320 crores) with scale advantages
- Robust Operating Cash Flow: ₹7,066.20 crores annual operating cash flow provides debt servicing capability
- Zero Promoter Pledging: No pledged shares indicates financial stability at sponsor level
- Structural Demand Tailwinds: 5G rollout and data consumption growth support long-term infrastructure demand
Key Concerns
- Elevated Leverage: Debt-to-equity ratio of 3.88x creates financial fragility and limits operational flexibility
- Weak Interest Coverage: EBIT-to-interest ratio of 1.33x provides minimal cushion for debt servicing
- Modest Return Metrics: ROE of 6.72% significantly lags peers and indicates inefficient capital deployment
- Persistent Underperformance: Negative alpha across all time horizons versus Sensex raises wealth creation concerns
- Premium Valuation Multiple: P/E of 51.84x appears expensive relative to sector average of 35x
- Minimal Institutional Participation: Limited mutual fund (0.81%) and insurance (0.13%) holdings constrain liquidity
- Complete FII Exit: Foreign institutional investors reduced holdings from 19.75% to 0% signals confidence concerns
Outlook: Monitoring Debt Trajectory and Margin Sustainability
Positive Catalysts
- Sustained Revenue Growth: Continued 40%+ topline expansion from portfolio additions and organic growth
- Margin Stability: Operating margins maintaining 40%+ levels demonstrating pricing power
- Debt Reduction: Meaningful deleveraging through asset monetisation or equity infusion
- Enhanced Distributions: Maintenance or increase in dividend payouts supporting income thesis
- Institutional Re-entry: Return of FII participation or increased mutual fund holdings
Red Flags to Watch
- Rising Interest Burden: Interest costs exceeding 18% of revenues or declining coverage ratios
- Margin Compression: Operating margins falling below 38% indicating pricing pressure
- Debt Escalation: Debt-to-equity ratio exceeding 4.0x or debt-to-EBITDA above 8.0x
- Dividend Cut: Reduction in distribution rate signalling cash flow stress
- Further Institutional Exodus: Continued selling by domestic institutional investors
The forward outlook hinges critically on the trust's ability to manage its elevated debt burden whilst maintaining distribution levels. The robust operating cash flow generation of ₹7,066.20 crores annually provides some confidence in debt servicing capability, but the thin interest coverage ratio leaves limited room for error. Any deterioration in operating performance or unexpected increase in interest rates could rapidly stress the financial structure.
Revenue growth sustainability represents another key monitoring point. The dramatic 50.76% quarter-on-quarter jump in December 2024 suggests a major portfolio addition, and investors should track whether subsequent quarters can maintain elevated revenue levels or whether this represents a one-time step-up. The modest 0.83% sequential growth in Q2 FY26 raises questions about organic growth momentum beyond inorganic additions.
The Verdict: Income-Focused Hold with Elevated Risk Profile
Score: 67/100
For Fresh Investors: Not recommended for fresh purchases. The combination of elevated leverage (3.88x debt-to-equity), weak return metrics (6.72% ROE), and premium valuation (51.84x P/E) creates an unfavourable risk-reward profile despite the attractive dividend yield. Investors seeking income should consider waiting for either meaningful deleveraging or a more attractive entry point below ₹145.
For Existing Holders: Continue to hold for the exceptional 15.79% dividend yield, which provides compelling income generation. Monitor debt levels closely—any increase in debt-to-equity above 4.0x or decline in interest coverage below 1.2x should trigger a re-evaluation. Consider partial profit-booking if the stock approaches ₹160 (52-week high) to reduce concentration risk.
Fair Value Estimate: ₹148 (2% downside from current levels). The valuation appears broadly fair at current levels, with the generous dividend yield offsetting concerns about leverage and modest returns. Meaningful upside requires either substantial deleveraging or sustained margin expansion, neither of which appears imminent based on current trends.
Note— ROCE = (EBIT - Other Income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance does not guarantee future results, and all investments carry inherent risks including the potential loss of principal.
