- 02 May 2024
- ICICI Securities
Provision writeback aids margins and bottomline; Vi dues recovery key ahead
INDUSTOWER - 344 Change: 2.65 (0.78 %)News: Indus Towers net tenancy was up by 7909 during the quarter with average sharing factor of 1.69 (vs. 1.72x in Q3) with addition largely driven by Airtel rural expansion. The revenue was flat QoQ and up 6.5% YoY at ₹ 7,193 crore, driven by rental revenues at ₹ 4578 crore, up 2.2% QoQ and 7.7% YoY. Ebitda margin was 56.6% (up 680 bps QoQ) with EBITDA at ₹ 4072 crore driven writeback if provision of ₹ 370 crore as it collected past dues. Net profit was up 20% QoQ at 1853 crore aided by higher EBITDA.
Views: We note that tenancy addition and margins reported are healthy. Nonetheless, key will dues from Vi which has remained delayed and impacted the cash flows. Post fund raise, it will be important to monitor Vi approach to overdue payments (Indus has so far provided for ₹ 5400 crore as provision for doubtful debt).
Impact: Neutral