Indus Towers Limited

Prachur Sah

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Prachur Sah

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Prachur Sah

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Prachur Sah

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Prachur Sah

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Prachur Sah

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Prachur Sah

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Vikas Poddar

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Vikas Poddar

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Vikas Poddar

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44.0 billion, representing a 7.1% increase year-on-year, but a 37.2% decline quarter-on-quarter.

— Vikas Poddar

Adjusted for the write-back and the accounting impact of the acquisition, our EBITDA grew 12.8% year-on-year and 7.6% quarter- on-quarter.

— Vikas Poddar

Our reported energy margins were -5.2% in Q4, which includes accounting impact of common control transaction as explained earlier.

— Vikas Poddar

I think broadly, I mean, while this metric does indicate the trend, but with several moving parts, it's very difficult to really try to reconcile this with the revenue growth.

— Vikas Poddar

So somewhere we will try to improve this going forward, but it's very difficult to put a number to this.

— Vikas Poddar

I mean typically, whatever rollouts happen in the quarter, the full quarterly impact of that is visible only in the following quarters.

— Vikas Poddar

So we don't see that risk for a terrestrial network in the foreseeable future, right.

— Prachur Sah

Do you think the demand for tower itself see a material decline and now that we have created so much of capacity on 5G?

— Sanjesh Jain

Q

Thank you, Michele and a very warm welcome to all participants. Joining me today are my colleagues, Mr. Vikas Poddar, CFO; Mr. Tejinder Kalra, COO and Mr. Dheeraj Agarwal, Head of Investor Relations on the call. I'm pleased to present our business performance for the quarter and year ended on March 31, 2025. We're proud to have delivered another stellar year with our tower and tenancy additions being one of the highest in our history, after having a record- breaking performance in FY24. Our inherent strengths including superior execution capabilities have helped us maintain a major share in ou

Vikas Poddar

Thank you, Prachur and good afternoon, everyone. I'm pleased to present our financial results for the quarter and full year ended 31st March 2025. FY25 was another strong year for us. We achieved substantial tower and tenancy additions, driven by our ability to capture a significant share of our customers rollout plans. A key highlight of the year was the clearance of large portion of overdue receivables from a major customer, which positively impacted our cash flows and overall financial health. Turning to the financial performance for Q4 FY25. We reported gross revenues of Rs. 77.3 billion,

Q

Thank you for the opportunity. I have two questions. First question is on dividend. There was a general expectation that once backlog from Vodafone Idea is cleared, your Company will start giving dividends. Wanted to know the reasons for dividend being not declared and a committee being constituted. And any general thoughts that what would be a timeline when we could see a decision either on dividend or buyback coming? Related question to that is, we are acquiring Bharti's 12,600 towers. So the amount, roughly Rs. 20-odd billion what you're paying to acquire these towers, will that also be con

Prachur Sah

So for both the questions, I'll take the first one, and maybe you can take the second one, Vikas. So as I explained in my opening remarks, I think -- the Company has generated a significant amount of FCF for the year, which was also aided by the clearance of the past dues. This enabled us to return a part of it to the shareholders through the buyback during the year. And as I discussed, the Company's strategy with the Board was to pursue growth, both organic and inorganic, some of that you saw in the results as well. And also to see how we can drive transformation on our sizable infrastructure

Q

Thanks for taking my questions. I have a couple of them. First, starting with the dividend. The dividend policy remains intact, right? 85% of the free cash flow will be distributed to the investors. Does the method of repaying the cash is to be decided or even the dividend policy is being rethought by the committee?

Prachur Sah

No. I think what the committee is going to focus on is the modalities of distribution of the cash, right. And if there is any discussion that is going to come up on the policy as well, they will look at it. But the primary aim of the subcommittee is to look at the modalities of distribution of the cash to shareholders. And number two, we still have some debt on the book. What will be the priority in terms of cash distribution from the capital allocation perspective? Is it to first go net debt free and distribute the remaining cash to the investor or we are okay with the small leverage on the b

Q

Thank you for the opportunity. At the time of announcing the purchase of towers from Airtel, you had mentioned that you will take loans to fund this transaction. Just to understand this better, in your balance sheet, I see that the borrowings are flat on a sequential basis. Does this mean that the transaction has not been funded with debt? That is question one. And secondly, I think to Sachin's question on dividends, I think Vikas, you said that the Airtel transaction will also be a consideration for payment of dividend. Why is that the case? Because it seems to contradict what you said in the

Vikas Poddar

So Vivekanand to answer that, broadly, the intent is to fund the tower acquisition through borrowing. But because we have substantial collection in this year, we used that to basically purchase the towers, but it should be seen more as a timing issue. So as and when the distribution decision is made, whatever is required will be done at that point of time in terms of borrowing. Okay. And on my second question, which pertains to dividends. Will the amount that was paid out to Airtel, will it be available? Or has it already been earmarked for that purchase, so now it is not available for distrib

Q

Two questions. First is, can you give us an update on the industry structure, in particular, kind of I will be curious to see what you're seeing on the ground with Summit and ATC combining operations?

Prachur Sah

I mean, to be honest, I've answered this question earlier in the previous calls as well. I mean, I don't think it impacts as much because the structure remains the same with the entity that has changed. So modus operandi I don't see much change and I can speak for Indus, our focus remains to make sure that we remain the market leader in terms of having the market share that is out there. But from an industry structure point of view, we don't feel any change per se with this particular change. There's no migration which you're seeing, is that a fair understanding? Yes, we only see positive migr

Q

Prachur, in your opening remarks, you mentioned that there is roughly 40,000 5G towers added during the year in the industry. Can you talk about more qualitatively on these, where this was done and what kind of towers was done and similar kind of attributes in these 5G towers?

Prachur Sah

See when I talked about the 40,000 number, it was not tower, it was base stations. So I think it's not tower, 5G comes in form of loading at our towers as additional technology. So the addition is actually more on the technology side on an existing tower, not a separate tower. Okay. So as such, there is the infill towers for 5G, it's not yet started on a broad basis? No, I don't think. It's not started yet. So first, the operators still need to have a full 5G coverage and then depending upon the data capacity needs we'll see. I mean, it happened in the 4G times, probably we'll see in the 5G ti

Q

I had 2 questions. Firstly, again, just to clarify on the dividend bit, so your free cash flow in the fourth quarter was Rs. 39 billion. This obviously does not include the consideration for the tower acquisition, which was Rs. 18 billion. So if I take -- I mean what would be the number you would consider for dividend payout? Would you take Rs. 39 billion? Or would you take Rs. 39 billion minus Rs. 18 billion, which is Rs. 20 billion. So I assume your policy remains to pay out 100% of free cash flow? Just wanted some clarification because I think I've been a bit confused because previously, yo

Vikas Poddar

Saurabh, if I take that question, I think this pretty much we tried to address and explain in the first round itself when Sachin had raised a very similar point. So while from a cash management perspective and because we have generated a very healthy cash in Q4 as well as on a full year basis, we have used that cash to fund the acquisition which obviously will lead to long-term growth and all that. And like I said, obviously, the committee will take into consideration all these things, they will obviously look at the free cash flow generation and then decide the distribution modalities and the

Q

Yes, I have a couple of follow-ups. So, number one is on the new composite billing scheme that you have rolled out. Earlier, you were mentioning about a very different kind of energy contract model, fixed energy model versus reimbursement. Is this composite billing in the nature of the fixed energy model. Can you please elaborate on how this could potentially influence your energy margins in the long term? That is question one. Secondly, based on your conversations with telcos, how is the fiscal 2026 capex outlook looking like for you?

Prachur Sah

So, on the first question, I would like to clarify when I was talking about composite billing, it was not composite billing for billing to our customers. It was a composite billing from DISCOMs for our sites because we have distributed assets, we get bills for individual towers. So, what we had been trying with the Government to see if we can get a composite bill in a given state that make the transactions a bit easier and much simpler to manage. So the composite billing was not from our customer point of view. It is a Government initiative to provide composite billing to large users so that t

Q

First is maintenance capex seems a little higher this quarter. Any reason for that?

Prachur Sah

Yes. I mean, if I can answer. So typically, if you see Q4 is the time where we are setting ourselves for monsoon as well. So, I think typically, the maintenance capex every year Q4 sees a little bit of a jump because this is the time post monsoon. In fact, Q3 and both Q4 and Q1 typically see a higher number than the middle two quarters because post rain is when you can start thinking to go to the site and start deploying the infrastructure to get ready for monsoon or do whatever replacements you have to do. So it's not Q4 specifically. It's generally how the maintenance happens. Understood. An

Q

I just have one question. So, in the previous quarter, you had announced your foray into EV charging infrastructure. So just wanted to understand if you have firmed up any plans on that front? And what is your capex that you expect to put into this business over the next 2 years?

Prachur Sah

Kishan, I think as I explained in the last earnings call as well, what we started to look at is the commercial pilot for the EV business. And based on the pilot results and if it gives us scale, then we would consider whether we want to expand or it's something that we'll hold back. So, I think currently, we're evaluating that pilot. And if it offers some scale, then we'll have a discussion. But if not, I think our focus will remain on the towers. So we'll keep you posted on any decision on that front.

Q

Sir my question regarding the potential partnership between the Starlink and the telecom giants like, Airtel, Jio, and Vodafone. The question is that what is the role of the future of the traditional towers? Would this collaboration render the towers redundant?

Prachur Sah

To be honest, I think it's a good question. But however, as of now, based on our discussions with the telecom operators and in general, I think there are limitations and commercial constraints as far as the satellite technology is concerned. So we don't see that risk for a terrestrial network in the foreseeable future, right. And I don't expect that impacting us anytime soon.

Q

At one point in time, you discussed about the possibility of entering into infrastructure like data centers. Is there any kind of a discussion on that? Do you see something like that happening in the future?

Prachur Sah

Honestly speaking, Varharajan, I don't think we ever discussed. I don't think we discussed data center from our side. There was some speculation in media. So I think that was a very speculative article that came out. So I don't think we have discussed that as an option currently because our focus remains on the tower growth primarily. So as of now, data center is not under consideration.

Q

Yes, Vikas, I got just one clarification. There is a line item in the cash flow which talks about the consideration paid for the acquisition of passive infrastructure of 1,800 crores. This, I thought is a payment for the Airtel, for the towers we bought, correct?

Vikas Poddar

That's right, Sanjesh. Because in many instances, we told that we haven't paid this consideration. I saw that it's been paid, right? There's nothing pending to be paid to Airtel from this perspective, right? Only Hexacom deal is yet to be consummated. Is that understanding right? That's right. Yes. Got it. That's one. Second, Prachur, I was just asking a question before I got disconnected. So if you look at the growth on the data side, it has materially decelerated despite FWA, one of the largest operator has reported under 20% growth on the data, the data consumption really showing pattern of

Q

So just wanted to understand the ARPT profile currently for the towers acquired from Airtel, like what would it be in the next year? What should we take?

Vikas Poddar

See, the towers acquired from Airtel as of the acquisition date or the year-end date are largely single tenancy towers, right? So they will have the ARPT or the revenue in line with the MSA for single tenancy. So as and when we get more tenancy, then obviously, there will be some growth in terms of overall revenue for the tower and so on. But for the time being, they are reflecting largely the single tenancy revenues. And like which circles, would this be pertaining to? And is there an opportunity to have an incremental tenant here? Yes. So they are across the country pretty much in all circle

Q

Thanks, Michele. In summary, FY25 marked another strong year for Indus Towers driven by robust tower and tenancy additions as we retained a significant share of our customers' network expansion. Equally important, a major customer cleared its large overdue payments during the year, aiding the generation of strong cash flows. Notably, our customers are continuing with their rollout activities, providing us with an opportunity to secure a substantial share of their rollouts. We will continue to work towards strengthening our market leadership position through participation in customer rollouts a

Management