- 03 Aug 2022
- ICICIdirect Research
One-time provision impacts margins/bottomline of Indus TowersINDUSTOWER - 151 Change: 0.10 (0.07 %)
News: Revenues came in at Rs 6895 crore, down 3.1% QoQ with rental revenues at Rs 4223 crore, down 11% QoQ. On adjusted basis, like to likecore rental revenues were up 0.6% QoQ. The company reported net addition of 591 co-locations vs. 685 co-location addition in Q4, and much lower than our expectations of 1400 tenancy addition. Reported EBITDA came in at Rs 2262 crore, down 44% QoQ, with EBITDA margins at 52.8% (down 24 percentage points QoQ) owing to provision for Doubtful debts of Rs 1233 crore, against dues from Vodafone Idea. PAT came in at Rs 477.3 crore (down 66.3% QoQ) largely owing to provision for doubtful debt.
View: We seek clarity on dues from Vodafone Idea. The tenancy addition momentum has seen some softness for second consecutive quarter post decent traction in the last few quarters prior to that. Furthermore, clarity on long term tenancy growth outlook amid 5G rollout along with planned foray in allied activities such as smart cities or fibre etc. are the other key things to watch.