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Informist, Thursday, May. 1, 2025

By Anjana Therese Antony and Gopika Balasubramanium

MUMBAI – One client of Indus Towers Ltd. has cleared overdue payments with the company which boosted its free cash flows during the quarter. Despite this, its failure to pay out dividends to shareholders was one among the most frequently asked questions by analysts during the company's conference call Thursday. The company said it has formed a committee to assess its cash flow generation and consider buy backs or paying dividends to its shareholders. "A major customer cleared its large overdue payments during the year, aiding the generation of strong cash flows," the management said in a post-earnings call with analysts without specifying further details about this client.

The management's comments on dividend came after its failed to meet the Street's expectation that the company would pay dividends once major dues from one of its major client Vodafone Idea Ltd. is cleared. During the March quarter, the company's free cash flow remained robust at INR 38.7 billion and for the full year was INR 98.5 billion. The improvement in cash flow was driven by continued business momentum and collection of overdue receivables, which also led to INR-25.5-billion reduction in trade receivables during the quarter, the management said. The company also said that decisions on dividends is not going to be a long-term process and that the committee will take "a call on how the cash needs to be distributed."

In January, Indus Towers had informed exchanges that Vodafone Idea had cleared its outstanding dues with the company. Vodafone Group Plc had raised INR 28 billion by placing 79.2 million shares of Indus Towers through an accelerated book building offer on Dec. 5, proceeds from which were used to pay due to the telecom tower company. 

Speaking about the acquisition of towers from its promoter Bharti Airtel Ltd., the company said it intended to fund the transaction through borrowings. "As and when the distribution decision is made, whatever is required will be done at that point of time in terms of borrowing," Indus Towers management said. 

In February, Bharti Airtel had said it will sell 12,700 telecom towers--which include macro sites, ultra-lean sites, and mobile cell units--for INR 21.75 billion to Indus Towers. Bharti Airtel had also said its subsidiary Bharti Hexacom Ltd. will transfer around 3,400 telecom towers to Indus Towers for INR 11.34 billion. The company also said it was confident about delivering strong growth in 2025-26 (Apr-Mar). Indus Towers also said it believed its order book was quite strong at present. 

For the March quarter, the company's consolidated net profit fell nearly 56% sequentially to INR 17.79 billion, while revenue rose over 2% on quarter to INR 77.27 billion. The company declared its financial results after market hours Wednesday and its shares closed 1.4% higher at INR 408.20 on the National Stock Exchange. The domestic equity market was shut Thursday for Maharashtra Day.  End

Edited by Akul Nishant Akhoury

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