Earnings Review
Indus Towers consol PAT jumps up, topline stays sluggish
This story was originally published at 21:37 IST on 23 January 2025
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--Indus Towers Oct-Dec consol PAT INR 40.03 bln vs INR 22.24 bln qtr ago
--Indus Towers Oct-Dec consol revenue INR 75.47 bln vs INR 74.65 bln qtr ago
--Indus Towers Apr-Dec consol PAT INR 81.53 bln vs INR 41.83 bln year ago
--Indus Towers Apr-Dec consol revenue INR 223.96 bln vs INR 214.07 bln yr ago
--Indus Towers Oct-Dec consol EBITDA INR 69.97 bln, up 93.2% on year
--Indus Towers Oct-Dec consol EBITDA margin 92.7% vs 65.7% quarter ago
--Indus Towers Oct-Dec towers base 234,643 units vs 229,658 units qtr ago
--Indus Towers Oct-Dec co-locations base 386,819 units vs 379,236 qtr ago
--Indus Towers sharing revenue/tower per month was INR 68,080 quarter ago
--Indus Towers Oct-Dec sharing revenue/tower per month INR 68,349
--Indus Towers sharing revenue/operator per month was INR 41,125 qtr ago
--Indus Towers Oct-Dec sharing revenue/operator tower per month INR 41,426
--Indus Towers Oct-Dec capex 12.26 bln vs 15.18 bln quarter ago
By Rajesh Gajra
NEW DELHI – Telecom infrastructure company Indus Towers Ltd. reported a mixed earnings performance for the December quarter, with sluggish revenue growth for the second quarter in a row and strong growth in operating margin and bottomline numbers. The mixed performance was also evident from the fact that the topline missed analysts' expectation but the net profit was significantly above Street estimates.
For the quarter ended December, Indus Towers' consolidated net profit jumped up 80% on quarter to INR 40.03 billion, and was above analyst estimates which ranged from INR 19.12 billion to INR 24.0 billion. The consolidated revenue was up sequentially by only 1.1% at INR 75.47 billion, which was below Street estimate of INR 76.65 billion. On a year-on-year basis, the net profit jumped up 2.6 times while the revenue was up by only 4.8%.
The company's profitability, in terms of earnings before interest, tax, depreciation, and amortisation margin, expanded sharply to 92.7% in Oct-Dec from 65.7% in the previous quarter and 50.3% in the year-ago quarter. In value terms, Indus Towers' EBITDA rose 43% sequentially and 54% on year to INR 69.97 billion.
The jump in EBITDA and net profit of Indus Towers in the December quarter was largely on a rise in account of a write-back of provision for doubtful receivables of INR 30.2 billion from INR 10.77 billion in the previous quarter. The company said the write-back was "aided by collections against past overdue." According to analysts, this was likely on account of recent improvement in collections by the company from Vodafone Idea Ltd., a major customer.
Excluding the allowances for doubtful receivables, the operating expenditure productivity of Indus Towers, calculated as operating expenses divided by total sharing revenue, declined by a small margin to 15.6% in the December quarter from 15.8% in the September. The operating expenditure productivity was 16% in the year ago quarter. This indicates that the actual operational efficiencies of the company improved only a little.
The sequential EBITDA and EBITDA margin growth was also aided by a decline of 2.3% in power and fuel expenses to INR 28.25 billion. Compared to the same quarter in the previous year, the power and fuel expenses rose by 1.1%.
Other than Vodafone Idea, Bharti Airtel Ltd. is a large customer for Indus Towers. Both, Vodafone and Airtel, have been focussing on expanding coverage and capacity in the last few quarters, and that has aided Indus Towers' earnings to a major extent.
The drag on the company's topline growth in the Oct-Dec quarter was primarily due to a 1% fall in energy reimbursements to INR 27.31 billion, and a small increase of 2.3% in sharing revenue to INR 48.17 billion. Sharing revenue made up for 64% of total revenue of the company while energy reimbursements accounted for 36% in the December quarter.
The company's towers base increased to 234,643 units in the December quarter from 229,658 units in the previous quarter, and the sharing revenue per tower per month increased to INR 68,349 from INR 68,080. The co-locations base of the company rose sequentially to 386,819 units from 379,236 units, with the sharing revenue per operator per month inching up to INR 41,426 from INR 41,125.
The company incurred a capital expenditure of INR 12.26 billion in the December quarter compared to INR 15.18 billion in the previous quarter. For Apr-Dec, Indus Towers' net profit rose sharply by 95% on year to INR 81.53 billion, while revenue from operations rose by 4.6% to INR 223.96 billion.
Shares of Indus Towers Thursday ended 2.7% higher at INR 366.60 on the National Stock Exchange. End
Edited by Ashish Shirke
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