- 28 Oct 2022
- ICICIdirect Research
VODAFONE IDEA DUES PROVISION DRAGS INDUS TOWERS PROFITABILITY AGAIN
INDUSTOWER - 347 Change: -2.70 (-0.77 %)News:
Rental revenues came in at Rs 4785 crore, up 13.3% QoQ (up 12.5% YoY). We await details on whether the rental revenues had any element of one-off. The company reported net addition of 1746 co-locations vs. 591 co-location addition in Q1, higher than our expectations of 1000 tenancy addition, aided by pick-up from 5G network roll outs. The energy revenues came in at Rs 3182 crore, up 19% QoQ, despite lower diesel prices QoQ (we await clarity on the same). Reported EBITDA came in at Rs 2811 crore, down 22%YoY, with EBITDA margins at 35.3% (down 17 percentage points YoY) vs. expectations of 51.6%. The company provided against doubtful debts of Rs 1771 crore, against dues from Vodafone Idea
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The tenancy addition momentum has seen some traction led by 5G roll out. Going ahead, long term tenancy growth outlook amid 5G rollout along with planned foray in allied activities such as smart cities or fibre, etc, are key things to watch for medium term triggers. For near term monitorable, we seek clarity on dues from Vodafone Idea and the company’s measure to collect it. We remain cautious on the overall prospects until there is improvement in dues collections from VIL
Impact:
Negative