Earnings Outlook
Rise in co-locations to drive Indus Towers Q1 consol sales
This story was originally published at 21:39 IST on 29 July 2025
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By Arya S. Biju
MUMBAI – Robust net tenancy additions and increasing number of co-locations led by network expansion by two of its largest clients--Vodafone Idea Ltd. and Bharti Airtel Ltd.--is expected to drive Indus Towers Ltd.'s top line for the June quarter. However, the lack of reversal of provisions during the quarter and seasonally higher power costs are expected to hit the company's bottom line.
Indus Towers had received a write-back of INR 2.30 billion in provisions for doubtful receivables during the March quarter and of INR 30.00 billion in the December quarter. However, no such reversal of provision is expected in the latest quarter, given that Vodafone Idea has paid all of its undisputed past dues, JM Financial Institutional Securities Pvt. Ltd. said in an earnings preview.
The telecommunications infrastructure company's consolidated net profit for the latest quarter is expected to decline over 6% on quarter and over 13% on year to INR 16.67 billion, according to the average of estimates by four brokerages. Its consolidated revenue, on the other hand, is expected to rise nearly 4% on quarter and over 8% on year to INR 80.08 billion.
Centrum Broking Ltd. has the highest estimate for the company's consolidated net profit at INR 17.61 billion and Motilal Oswal Financial Services Ltd. has the lowest estimate of INR 16.00 billion. JM Financial has the highest estimate of INR 81.01 billion for net sales and Centrum Broking has the lowest estimate of INR 79.33 billion.
The company's consolidated earnings before interest, tax, depreciation, and amortisation for the June quarter is expected to be INR 42.16 billion, down over 4% on quarter and over 7% on year. Adjusted for one-offs and provision write-offs, the company's EBITDA for the quarter is expected to grow 2.5-4.0% on quarter, as per estimates from three brokerages.
While Kotak Institutional Equities expects the company's adjusted EBITDA for the quarter to grow 2.6% sequentially on the back of healthy net tenancy additions, Motilal Oswal Financial Services expects it to rise around 4% on quarter as the company will get the full benefit of towers acquired from Bharti Airtel in the preceding quarter.
Indus Towers is expected to have added 3,000-3,600 towers during the June quarter, driven by network expansion by its top clients, estimates from three brokerages showed. However, this will be lower than the 14,662 towers added in the previous quarter. The company's net tower additions during the March quarter included 10,380 macro towers acquired from Bharti Airtel. Excluding this, the company added 4,282 towers, which is still higher than the estimated net tower additions for the June quarter.
Kotak expects the company's net tenancy additions for the quarter to be around 5,000, while JM Financial and Motilal Oswal expect it to be around 7,000. Centrum Broking expects the company to add 7,200 co-locations during the quarter.
Further, JM Financial expects the company's average rental per tenancy to improve 0.8% sequentially during the June quarter. "We assume that the average rental per tenancy (ARPT) will improve QoQ (quarter-on-quarter) with the full quarter benefit of higher ARPT on tower portfolio acquired from Bharti (largely single tenancy towers), partly offset by negative impact of sharing discount due to tenancies from Vodafone Idea on account of its ongoing network expansion rollouts (largely forming second tenancy on existing towers)," JM Financial said.
Indus Towers will announce its June quarter earnings Wednesday. Investors will watch out for management commentary on receivables from Vodafone Idea, Centrum Broking said in an earnings preview.
Tuesday, shares of Indus Towers ended at INR 390.55 on the National Stock Exchange, up 1.6%. The stock has risen just about 3% since the announcement of its March quarter earnings. The stock is, however, down nearly 22% from its all-time high of INR 499.65 achieved on Aug. 5, 2015.
Of the six research reports available on the company with Informist, three have a "buy" or equivalent rating on the stock with an average target price of INR 446 per share, two have a "hold" or equivalent rating, while ICICI Securities Ltd. has a "reduce" rating with a target price of INR 335 per share.
Following are the June quarter earnings estimates for Indus Towers, in INR million, based on reports from four brokerages, in descending order of net profit:
| Brokerage | Net Sales | Net Profit | EBITDA |
|---|---|---|---|
| Centrum Broking | 79,334.00 | 17,606.00 | 41,844.00 |
| Kotak Institutional Equities | 79,989.00 | 16,682.00 | 42,024.00 |
| JM Financial Institutional Securities | 81,013.00 | 16,379.00 | 42,775.00 |
| Motilal Oswal Financial Services | 80,000.00 | 16,000.00 | 42,000.00 |
| Average | 80,084.00 | 16,666.75 | 42,160.75 |
End
Edited by Rajeev Pai
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