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Result Update – Indus Towers, ICICI Direct

Weak operating performance.

  • Net addition of 1746 co-locations was seen in Q2. Lean towers (not reflected in tenancy count) saw a strong addition of 1535, during Q2 vs. 1021 in Q1. Revenues came in at | 7967 crore, up 15.5% QoQ as it included one-time provision reversal of | 1100 crore in Q2. The reported rental revenues came in at | 4785 crore, up 13.2% QoQ, aided by one-time provision reversal of | 550 crore. Like to like core rental revenues were up 0.3% QoQ
  • EBITDA was at | 2811 crore, up 24.3% QoQ, with margins at 35.8% (up 249 bps points QoQ) as the company provided for doubtful debts of | 1771 crore (vs. | 1233 crore in Q1) against dues from Vodafone Idea. Adjusted EBITDA was at | 3482 crore, down 0.4% QoQ and margins at 50.7%, flattish QoQ

Key triggers for future price performance

  • In the medium term, opportunities in adjacent areas (viz. small cells/smart cities/in building solutions/active network sharing) to drive growth along with overall tenancy demand from 5G transition
  • Normalisation of VIL stress, which is stretching working capital

For report,

CT Bureau

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