Indus Towers (erstwhile Bharti Infratel) – Q1FY22 first cut, ICICI Securities

Indus Tower reported in line core performance, albeit higher energy revenues and negative energy margins led to tad higher/lower overall reported revenues/EBITDA margins.

Q1FY22 Earnings Summary

• Revenues came in at Rs. 6797 crore, up 4.7% QoQ tad higher than our expectations of Rs. 6694 crore, owing to higher than anticipated energy revenues which came in at Rs. 2586 crore, up 10% QoQ, due to higher diesel prices.   The rental revenues which came in at Rs. 4211 crore, up 1.7% QoQ, was in line. We highlight that Q1FY22 rental revenues  included exit penalty  of Rs. 182.4 crore, vs. Rs. 175.9 crore in Q4). The company reported net addition of 2917 co-locations (~3123 on gross basis) vs. expectations of 2910 addition
• EBITDA came in at Rs. 3517 crore, up 3% QoQ, with EBITDA margins at 51.7% (down 83  bps QoQ) vs. expectations of 52.1%. The margin was lower as company reported negative energy margins (-2.3%) vs. expectations of 1%
• PAT came in higher than estimates at Rs. 1415 crore (up 3.8% QoQ) vs. expectations of Rs. 1390 crore, largely owing to lower depreciation

The tenancy addition momentum remains decent and is therefore, comforting.  Vodafone Idea survival, however, holds the key for the long term tenancy growth outlook along with planned foray in allied activities such as smart cities or fibre etc. We seek management commentary on growth outlook and recovery. We will come out with an update post the conference call tomorrow.

CT Bureau