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Indus Towers Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤2nd Feb 26

Summary : Indus Towers reported a profit decline in Q3 2025 due to the absence of prior year's one-off gains, while pursuing African expansion and managing key customer receivables.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Power and fuel: Q3 2025 Rs. 29,517 Mn, 9M 2025 Rs. 91,073 Mn.
  2. Employee benefit expenses: Q3 2025 Rs. 2,291 Mn, 9M 2025 Rs. 6,475 Mn.
  3. Repairs and maintenance: Q3 2025 Rs. 3,507 Mn, 9M 2025 Rs. 10,969 Mn.
  4. Other expenses: Q3 2025 Rs. 1,037 Mn, 9M 2025 Rs. 244 Mn (includes doubtful receivables).
  5. Depreciation and amortisation: Q3 2025 Rs. 18,186 Mn, 9M 2025 Rs. 53,640 Mn.
  6. Finance costs: Q3 2025 Rs. 4,870 Mn, 9M 2025 Rs. 14,241 Mn.
  7. Allowances for doubtful receivables (net) Q3 2025: Rs. (13) Mn.
  8. Significant part of outstanding trade receivables from a large customer.
  9. Revenue from operations: Q3 2025 Rs. 81,463 Mn, 9M 2025 Rs. 243,921 Mn.
  10. Other income: Q3 2025 Rs. 1,538 Mn, 9M 2025 Rs. 3,218 Mn.
  11. Paid-up equity share capital: Rs. 26,381 Mn.
  12. Other equity: Rs. 352,234 Mn.
  13. Indus Towers Employees Welfare Trust for ESOP administration.
  14. Trust acquired 750,000 shares, transferred 660,541 shares to employees.
  15. Both Audited Consolidated and Standalone Financial Results are presented.

Corporate Overview

  1. Expansion into African markets: Nigeria, Uganda, Zambia.
  2. Incorporated subsidiaries in UAE for overseas operations.
  3. Incorporated subsidiary in GIFT City, India for investment holding.
  4. Financial condition of a large customer, impacted by AGR matter.
  5. One-time increase in employee benefit provisions due to New Labour Codes.
  6. Significant dependency on a large customer for revenue and receivables.
  7. Establishing, operating, and maintaining wireless communication towers.
  8. Management believes receivables from large customer will be recovered.
  9. A large customer accounts for significant revenue and receivables.
  10. Single reportable and geographical segment.
  11. Approved expansion into African markets (Nigeria, Uganda, Zambia).
  12. Incorporated subsidiaries in UAE and Africa for overseas operations.
  13. Incorporated subsidiary in GIFT City for investment holding.

Risk Factors

  1. Significant dependency on one large customer.
  2. Uncertainty regarding customer's financial health.
  3. Potential impact of AGR matter.
  4. New Labour Codes implementation costs.

Key Drivers

  1. African market expansion plans.
  2. Redemption of Non-Convertible Debentures.
  3. Recovery of large customer receivables.

Auditor’s Report

  1. Unmodified audit opinion on consolidated and standalone financial results.

Board Commentary

  1. Company's sole activity is wireless communication towers, main source of risks.
  2. Financial condition of a large customer.
  3. New Labour Codes resulted in one-time employee benefit provision increase.
  4. AGR matter impacting large customer's financial position.
  5. Approved expansion into African markets.
  6. Incorporation of new subsidiaries for overseas operations.

Corporate Governance

  1. Complied with Code of Ethics issued by ICAI.
  2. Audit & Risk Management Committee reviewed financial results.

Management Discussion & Analysis

Future Strategy

  1. Expansion into African markets through new subsidiaries.
  2. Setting up investment holding company in GIFT City for overseas subsidiaries.

Operational Focus Areas

  1. Monitoring financial condition of large customer.
  2. Ensuring recovery of receivables from large customer.

Risk Control Measures

  1. Management confident in recovery of receivables from large customer.

Critical Risks

  1. Dependency on a single activity (wireless communication towers).
  2. Financial health of a large customer.
  3. Impact of AGR matter on customer's ability to pay.