TOWR - Beyond Towers: Fiber Transformation Gains Traction

KBVS Update
Thursday, 9 July 2026

TOWR - Beyond Towers: Fiber Transformation Gains Traction
(Reiterate BUY - TP: IDR500)

1H26F: Non-tower business remains the key growth driver. Non-tower revenue should remain the key growth driver in 1H26F, rising 19.6% YoY to IDR2.6 tn (49.6% of FY26F forecast). Growth continues to be led by fiber monetization, with FTTT revenue expected to increase 18.2% YoY, while 2Q26F FTTT revenue is projected to rise 27.0% QoQ, lifting its contribution to 20.5% (vs. 16.0% in 1Q26).

FY26F: Fiber expansion offsets moderate tower growth. For FY26F, we expect non-tower revenue to remain the key growth driver, rising 12.0% YoY to IDR5.2 tn, led by FTTT growth of 17.5% YoY, increasing its revenue contribution to 24.8%. Overall, we forecast FY26F revenue growth of 4.5% YoY to IDR13.9 tn.

Margin resilience supported by improving revenue-mix. Fiber mix expansion should support profitability, with higher-margin fiber services offsetting network expansion costs. We forecast 1H26F EBITDA to grow 8.1% YoY to IDR5.8 tn (49.2% FY26F). 2Q26F EBITDA is estimated at IDR2.9 tn (+7.0% QoQ), with margin expanding to 82.6%. We maintain FY26F EBITDA/net profit forecasts at IDR11.7 tn/IDR3.8 tn.

BUY maintained Despite improving earnings quality, TOWR trades at just 5.5x FY26F EV/EBITDA, a 37.7% discount to its five-year average. We see the discount as unjustified given resilient cash flows and growing fiber monetization.

Regards,
Steven Gunawan - KBVS Research