28-Oct-2026 17:13:11
INDUS TOWERS Q2 CONCALL: REVENUE UP 4% YOY, EBITDA MARGIN EXPANDS TO 54.4%, 7,900 CO-LOCATIONS ADDED, ₹1,400 CR FREE CASH FLOW & AFRICA EXPANSION GAINS MOMENTUM
• MANAGEMENT EXPECTS CONTINUED HEALTHY TOWER & CO-LOCATION ADDITIONS, SUPPORTED BY A STRONG CUSTOMER ORDER BOOK, TELECOM NETWORK EXPANSION & INCREASING 5G CAPACITY REQUIREMENTS • MANAGEMENT EXPECTS CORE RENTAL REVENUE GROWTH FROM NEW TOWER DEPLOYMENTS, SECOND-TENANT ADDITIONS, EQUIPMENT LOADING & CONTRACTUAL RENTAL ESCALATIONS, ALTHOUGH NO NUMERICAL FY27 GROWTH GUIDANCE WAS PROVIDED • MANAGEMENT EXPECTS AFRICA TOWER ROLLOUTS TO ACCELERATE DURING H2 FY27, WITH OPERATIONS ALREADY COMMENCED IN ZAMBIA & UGANDA AND NIGERIA DEPLOYMENTS TARGETED FROM Q3 FY27 • MANAGEMENT EXPECTS STRUCTURAL ENERGY-COST SAVINGS THROUGH SOLAR POWER, LITHIUM-ION BATTERIES, SMART METERS & AI-BASED ENERGY MANAGEMENT, SUPPORTING LONG-TERM MARGIN IMPROVEMENT • MANAGEMENT EXPECTS NEW CUSTOMER ONBOARDING & CONTRACT RENEWALS TO GENERALLY CARRY MINIMUM 10-YEAR AGREEMENTS, SUPPORTING LONG-TERM RECURRING REVENUE VISIBILITY • Q2 REVENUE GREW 4% YOY & 1% QOQ TO ₹8,520 CR, SUPPORTED BY TOWER ADDITIONS, CO-LOCATION GROWTH & STABLE TELECOM INFRASTRUCTURE DEMAND • Q2 EBITDA STOOD AT ₹4,630 CR, UP 2.5% QOQ, WITH EBITDA MARGIN EXPANDING 80 BPS SEQUENTIALLY TO 54.4% • Q2 NET PROFIT REACHED ₹1,790 CR, UP 2.7% QOQ, WHILE QUARTERLY FREE CASH FLOW REMAINED STRONG AT APPROXIMATELY ₹1,400 CR • EXCLUDING APPROXIMATELY ₹200 CR OF OVERDUE-RECEIVABLE WRITE-BACKS IN THE PRIOR-YEAR QUARTER, Q2 EBITDA GREW 5.2% YOY & PAT INCREASED 6.4% YOY • CORE RENTAL REVENUE REACHED APPROXIMATELY ₹5,450 CR, UP 1.3% QOQ, REFLECTING MODERATE MONETISATION GROWTH DESPITE STRONG NETWORK ADDITIONS • COMPANY ADDED APPROXIMATELY 2,900 MACRO TOWERS DURING Q2, TAKING THE TOTAL TOWER BASE TO AROUND 2.71 LAKH, UP 5.6% YOY • APPROXIMATELY 7,900 CO-LOCATIONS WERE ADDED DURING THE QUARTER, WHILE THE CO-LOCATION BASE GREW 5.9% YOY, SUPPORTED BY FASTER ROLLOUTS FROM MAJOR TELECOM CUSTOMERS • TENANCY RATIO IMPROVED TO 1.63X FROM 1.62X, REFLECTING BETTER SHARING OF EXISTING TOWER ASSETS & IMPROVING OPERATING LEVERAGE • MANAGEMENT EXPECTS A HEALTHY MIX OF NEW TOWER CONSTRUCTION & SECOND-TENANT ADDITIONS, WITH HIGHER TENANCY SUPPORTING BETTER ASSET PRODUCTIVITY & RETURNS • INDIA'S 5G SUBSCRIBER BASE EXCEEDED 463 MILLION, WHILE APPROXIMATELY 30,000 NEW 5G BTS INSTALLATIONS DURING Q2 TOOK THE INSTALLED BASE TO AROUND 5.93 LAKH • MOBILE DATA CONSUMPTION INCREASED APPROXIMATELY 30% YOY, WHILE 5G DATA USAGE GREW 79% YOY & ACCOUNTED FOR 44% OF TOTAL DATA TRAFFIC • MANAGEMENT SEES LONG-TERM GROWTH OPPORTUNITIES FROM 5G NETWORK DENSIFICATION, HIGHER EQUIPMENT LOADING & INCREASING DATA CONSUMPTION ACROSS INDIA • ENERGY MARGIN IMPROVED BY APPROXIMATELY 100 BPS QOQ TO NEGATIVE 3.6% VS NEGATIVE 4.6% IN Q1, SUPPORTED BY LOWER DIESEL CONSUMPTION & IMPROVED ENERGY EFFICIENCY • DIESEL CONSUMPTION DECLINED 11% YOY, REFLECTING HIGHER SOLAR ADOPTION, BATTERY UPGRADES & IMPROVED SITE-LEVEL ENERGY MANAGEMENT • COMPANY ADDED APPROXIMATELY 3,000 SOLAR-POWERED SITES DURING Q2, TAKING THE TOTAL TO AROUND 49,000 SITES, WHILE INSTALLED SOLAR CAPACITY INCREASED TO 297 MW FROM 259 MW • APPROXIMATELY 1.4 LAKH TOWER SITES HAVE BEEN EQUIPPED WITH SMART METERS OVER THREE YEARS, SUPPORTING BETTER ENERGY MONITORING, COST CONTROL & BILLING ACCURACY • MANAGEMENT IS EXPANDING LITHIUM-ION BATTERY DEPLOYMENT, AI-BASED MONITORING, FUEL SENSORS & DIGITAL ENERGY SYSTEMS TO REDUCE OPERATING COSTS & IMPROVE SITE EFFICIENCY • AFRICA OPERATIONS HAVE STARTED GENERATING INITIAL REVENUE FROM TOWER DEPLOYMENTS IN ZAMBIA & UGANDA, WITH AIRTEL SERVING AS THE PRIMARY ANCHOR CUSTOMER • MANAGEMENT IS ENGAGING ADDITIONAL TELECOM OPERATORS IN AFRICA TO IMPROVE CUSTOMER DIVERSIFICATION, WHILE INITIAL TOWER CONSTRUCTION COSTS REMAIN WITHIN INTERNAL PLANS • CAPITAL WORK-IN-PROGRESS INCREASED BY APPROXIMATELY ₹250 CR QOQ, REFLECTING INVESTMENTS IN NEW TOWERS, 5G UPGRADES, SOLAR INSTALLATIONS & NETWORK INFRASTRUCTURE • COMPANY IS EXPANDING IN-BUILDING CONNECTIVITY SOLUTIONS ACROSS AIRPORTS, METROS, TUNNELS & PUBLIC INFRASTRUCTURE, ALTHOUGH THIS BUSINESS CURRENTLY CONTRIBUTES A SMALL SHARE OF RENTAL REVENUE • NETWORK UPTIME IMPROVED TO 99.97% FROM 99.955%, DESPITE SEVERE FLOODING & OPERATIONAL DISRUPTIONS IN SEVERAL REGIONS • MANAGEMENT IS IMPLEMENTING AI-LED IMAGE ANALYTICS, DIGITAL TWINS, AUTOMATED BILLING & REAL-TIME DASHBOARDS TO IMPROVE FIELD PRODUCTIVITY, MAINTENANCE EFFICIENCY & OPERATIONAL CONTROL • PRE-TAX TTM ROCE STOOD AT 25.3%, WHILE POST-TAX TTM ROE REACHED 19.2%, REFLECTING HEALTHY RETURNS FROM THE EXISTING TELECOM INFRASTRUCTURE PORTFOLIO • MANAGEMENT REMAINS POSITIVE ON TOWER ADDITIONS, 5G NETWORK EXPANSION, IMPROVING TENANCY, ENERGY SAVINGS & AFRICA GROWTH, BUT MODERATE RENTAL REVENUE GROWTH, CUSTOMER CONCENTRATION, NEGATIVE ENERGY MARGINS, CAPEX REQUIREMENTS & AFRICA EXECUTION REMAIN KEY RISKS
INDUS TOWERS LIMITED