Indus Towers – Q3FY23 first cut

Indus Tower margins and earnings were impacted by provision for dues of Vodafone Idea (VIL) again.

Q3FY23 Earnings Summary

• Revenues came in at | 6765 crore, down 15%% QoQ vs. our expectations of | 7042 crore. The rental revenues came in at | 4175 crore, down 12.7% QoQ (down 5% YoY). Like to like core rental revenues were down 1.4 % QoQ (base quarter had ~| 550 crore of provision reversal as part of reported rental revenues). The company reported net addition of 1307 co-locations vs. 1746 co-location addition in Q2, mostly driven by 5G network roll outs, in our view. The energy revenues came in at | 2590 crore, up 19% QoQ, down 1.6% QoQ on adjusted basis
• Reported EBITDA came in at | 1163 crore, down 68.6%YoY, with EBITDA margins at 17.2% (down 36 percentage points YoY) vs. expectations of 51.4%. The company provided against Doubtful debts of | 2270 crore, against dues from Vodafone Idea. Adjusted margin was 50.7%
• The company reported a loss of | 708 crore vs. expectations of | 1475 crore PAT, largely owing to provision for doubtful debt of | 2201 crore and exceptional charge of | 493 crore (impairment of Revenue equalization reserve for Vodafone idea dues)

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