MTEL - Resilient Core, Fiber Monetization Accelerates

KBVS Update
Tuesday, 12 May 2026

MTEL - Resilient Core, Fiber Monetization Accelerates
(Reiterate BUY - TP: IDR680)

1Q26 broadly inline; efficiency offsets cost pressure. 1Q26 EBITDA came broadly inline at IDR1.9 tn (+0.9% YoY). Core tower leasing remained resilient, while FTTT revenue growth (+8.6% YoY) continued to outpace the core business. Net profit rose +3.6% YoY, supported by lower interest expense, underscoring continued cost discipline and scale benefits.

Fiber monetization gains traction; tower business remains defensive. With 1Q26 broadly inline, we maintain FY26F estimates. Fiber remains the key growth driver, with FTTT revenue projected at IDR677 bn (+18.0% YoY), while tower leasing should stay resilient amid healthy co-location demand, especially outside Java. Supported by stable tenancy and modest lease-rate increases, we forecast FY26F revenue at IDR9.8 tn (+2.7% YoY).

Margin expansion remains intact. We expect further margin expansion, supported by rising co-location intensity and disciplined cost control. FY26F CoR growth should moderate to +2.7% YoY, underpinning EBITDA growth of +3.0% YoY with margin edging up to 82.4%. Below EBITDA, lower funding costs should further support FY26F net profit growth of +3.3% YoY and margin expansion to 22.4%.

Maintain BUY with TP of IDR680, based on 8.3x FY26F EV/EBITDA. MTEL trades at 7.9x EV/EBITDA, a 10.5% discount to its 3yrs mean, which we see as undemanding given resilient co-location demand and improving fiber monetization. Key risks remain higher-for-longer rates and elevated expansion costs.

Regards,
Steven Gunawan - KBVS Research