>TOWR delivered a relatively muted set of results in 3Q25, with segmental performance showing a mixed trend. Revenue came in at IDR3.29tn (+3.35% QoQ; -0.08% YoY), bringing 9M25 revenue to IDR9.69tn (+2.52% YoY). Tower leasing revenue remained modest at IDR2.12tn (+0.24% QoQ; -4.07% YoY), reflecting limited tenant additions (+0.08% YoY) and a slight moderation in tenancy ratio to 1.61x (vs 1.64x in 9M24). The softer tower performance was partly driven by ongoing mobile operator rationalisation. On the other hand, non-tower businesses, continued to provide a meaningful revenue buffer. FTTH revenue grew +26.30% YoY in 9M25, supported by home-passes expansion to 1.80mn (+19.73% YoY) and home-connect subscribers rising to 235.9k (+48.71% YoY), lifting take-up rate to 13.13% (vs 10.57% in 9M24).

>Profitability remained solid despite margin normalization. EBITDA stood at IDR2.71tn in 3Q25 (+2.33% QoQ; -3.75% YoY), driving 9M25 EBITDA to IDR8.03tn (+1.08% YoY), with margins easing to 82.91% (vs 84.09% in 9M24) due to a rising non-tower contribution, which structurally carries lower margins. Net profit rose to IDR903bn in 3Q25 (+6.28% QoQ; +7.19% YoY), bringing 9M25 net profit to IDR2.56tn (+4.39% YoY) and lifting net margin to 26.37% (vs 25.90% in 9M24). Earnings were supported by a 6.52% QoQ (-4.74% YoY) decline in finance costs, following a reduction of approximately IDR5.5tn in interest-bearing debt, which lowered interest expense and strengthened profitability.

>Strategic execution remains focused on navigating the consolidation impact and mitigating churn to preserve profitability. While rationalisation may continue to cap tenant growth in the near term, TOWR’s diversification through fiber expansion (FTTT & FTTH) has increasingly become a meaningful earnings buffer, reflected in a 3-year CAGR of 61.69% for non-tower segments. We also highlight the strategic value of TOWR’s stake in DATA.IJ, reinforcing the Group’s ecosystem integration for scalable FTTH rollout. In our view, the medium-term growth runway remains attractive, supported by fiber scaling and monetisation, alongside potential additional value creation from future infrastructure consolidation within the Group.

>We maintain our BUY recommendation on TOWR with a TP of IDR650 (see our previous report), as performance remains in line with expectations. TOWR is currently trading at 7.2x EV/EBITDA, implying a ~31% discount to its 6-year historical average of 10.4x. While TOWR is the most exposed to the EXCL–FREN consolidation, the strengthening fiber contribution and healthier balance sheet (DER 1.7x vs 2.6x in 1H25) provide room for future growth.

>Downside risks include: (1) higher-than-expected churn from EXCL–FREN tenancy rationalisation, (2) slower-than-expected monetisation of non-tower segments, and (3) execution delays in fiber ecosystem expansion.

By PHINTRACO SEKURITAS | Research
— Disclaimer On —

Contact Us:
WA: 08119055611
IG: phintracosekuritasofficial
YT: Phintraco Sekuritas Official
TELE: phintasprofits
www.phintracosekuritas.com
www.profits.co.id