Bharti Airtel’s telecom tower arm Indus Towers on Thursday mentioned that it has placed on maintain any instant plans to distribute money to shareholders. The corporate is eager to preserve money amid monetary stability considerations surrounding its main buyer Vodafone Concept, at the same time as it’s taking a look at the next capital expenditure cycle, and evaluating potential inorganic progress alternatives.
“The board believes that that is the very best curiosity of the corporate: strengthening its monetary resilience and enabling it to reply successfully to any rising alternatives and or dangers, guaranteeing the safety of its long-term enterprise curiosity,” Prachur Sah, managing director and chief government officer of Indus Towers, mentioned in a put up earnings name with analysts.
The corporate will now take a name on the money distribution by the top of the present monetary 12 months.
With out naming the debt-laden Vodafone Concept, Sah mentioned that stability of its buyer was not the one motive for the board to chop off money within the brief time period however there have been different components too. “The board stays totally dedicated to creating worth for the shareholders, together with by means of earliest potential reinstatement of distributions,” he added.
Feedback from Sah on the choice to pause returning money to shareholders—whether or not via dividends, buybacks, or bonuses—carry significance, particularly as Indus Towers has been receiving common funds from Vodafone Concept, together with towards a few of its previous dues. The corporate’s transfer to carry off on shareholder rewards within the close to time period additionally goes towards analysts’ expectations, who had anticipated money distribution in mild of improved money flows.
In 2024, Indus Towers carried out a share buyback—its first since 2016—value ₹2,640 crore. The corporate’s inventory fell almost 6% to ₹361.40 apiece on NSE on Thursday, because it held off on rewarding shareholders and as its quarterly revenue fell 10%.
Within the April-June quarter, Indus Towers reported a free money movement era of ₹1,566 crore, in comparison with ₹1,870 crore within the year-ago interval. The corporate mentioned its money movement era throughout the June quarter was pushed by sustained enterprise momentum and assortment of overdue receivables, which additionally led to a ₹400 crore discount in commerce receivables sequentially.
As of June-end, the corporate’s commerce receivables had been at ₹4,361 crore, in comparison with ₹4,768 as of March-end, interval and ₹5,722 crore within the year-ago quarter.
At the same time as Vodafone Concept has been clearing its dues, Indus Towers presently has created a provision of uncertain debt of ₹210 crore in relation to Vodafone Concept as of June-end, in comparison with ₹298 crore as of March-end. Presently, Vodafone Concept’s skill to proceed as a going concern and settle its liabilities depends on help from the division of telecommunications (DoT) concerning the adjusted gross income (AGR) matter, fundraise via fairness and debt and era of money movement from operations.
One of many key causes for Indus Towers to take a cautious method in direction of money distribution could possibly be its considerations associated to potential lack of enterprise from Vodafone Concept in case the telecom operator is unable to proceed as a going concern. In its earnings assertion, the tower firm acknowledged that if its buyer (Vodafone Concept) just isn’t in a position to proceed as a going concern and Indus Towers fails to draw new prospects, there could possibly be an opposed impact on its enterprise.
Within the April-June quarter, Indus Towers reported a 9.1% year-on-year (YoY) improve in income from operations to ₹8,058 crore. Nonetheless, the online revenue fell 9.8% at ₹1,737 crore on account of increased bills comparable to depreciation owing to acquisition of latest towers from Bharti Airtel and better vitality and energy bills comparable to elevated diesel consumption: The corporate noticed a ten% year-on-year improve in diesel consumption in Q1 FY26. This was attributed to unexpected occasions just like the early onset of monsoon and an unusually excessive variety of weather-related disturbances (heavy rainfall and thunderstorms), which required extra diesel utilization to keep up community uptime, the administration mentioned throughout the earnings name.
On natural and inorganic progress alternatives going ahead, Sah mentioned, “the concept is to see how we are able to seize the utmost market share relating to towers in India. In order of now the main focus stays on tower enterprise progress.”
Apart from progress alternatives, the tower firm is taking a look at incurring capital expenditure (capex) for upkeep of previous websites, new tower additions, know-how transition with regard to batteries for tower infrastructure, amongst different issues.
Within the June quarter, the corporate incurred a capital expenditure of ₹1,948 crore, in comparison with ₹1,882 crore within the year-ago interval. Of it, the upkeep capex, which is on restore and upkeep of current tower websites, rose to ₹551 crore from ₹260 crore a 12 months in the past.
“We now have an ageing portfolio and there are years after we will see quite a lot of deal with tower strengthening, sustaining and so forth. So, that is one such 12 months the place we’re focusing loads on strengthening our towers and mainly making these towers prepared for any tenancy progress,” mentioned Vikas Poddar, chief monetary officer of Indus Towers.
Indus Towers is transitioning from the previous batteries to extra lithium ion, new tech batteries which have the next upfront capex concerned, Poddar mentioned, including that there will likely be increased upkeep capex for the subsequent 3-4 years.
Sah mentioned that the tower additions from all the purchasers will likely be sturdy within the present monetary 12 months. Additional, rising information consumption and growing 5G adoption will proceed to create significant progress alternatives, he added.
Within the June quarter, the corporate added 2,468 towers sequentially, taking its towers depend to 251,773. The co-location websites had been at 411,212 in comparison with 405,435 within the previous quarter. Co-locations or tenancies confer with what number of telecom operators are utilizing a single tower. A single tower can host gear for a number of cellular operators—every is taken into account a co-location.
The portfolio tenancy ratio or common sharing issue for Indus Towers was at 1.63 throughout the quarter. It is a key metric which tells the typical variety of tenants per tower.
