Business Standard
Indus Towers hits over 8-month
low on growth concerns
Indus share price nas underperformed the market owing to concerns ove its
key tenant Vodafone idea's surviv
rotowwsor coos sor) EEE‘ALSO READ
Vodafone dea Qa preview:
Losses may narrow,
Shares of Indus Towers dipped 6.5 per cent to
Rs 207.75, hitting an over eight-month low on
‘the BSE in intra-day trade on Wednesday, in an
otherwise strong market, amid growth
concerns. The stock was trading at its lowest
level since November 20, 2020. Indus’ share
price has underperformed the market owing to
concerns over its key tenant Vodafone idea's,
(vil survivalcommentary on fundraising
eyes
‘Analysts posite on telecom
service providers despite
Sela in rif hike
Eye on revenue growth,
Vodafone lea revises plans
or corporate customers
Weak signals rom Indus
Towers on renewal, tenancy
‘Analysts dump Voda idea
for Airtel post AGR re
calculation case verdict
Indus Towers Limited (formerly Bharti nfr
Limited) is India's leading provider of passive
telecom infrastructure and it deplays, owns and
manages telecom towers and communication
structures, for various mobile operators. It
caters to all wireless telecommunication service
providers in India,
‘According to analysts, lower penalty receipts
from VIL in FY23E should taper growth,
Furthermore, its situation remains precarious,
weighed by ballooning debt and its inability to
raise funds and improve its liquidity. This
remains the biggest overhang for Indus Towers
as VILis its large client and the tower-sharing,
business has a limited business case for single
tenancy operations. On the other hand, the
threat from Rjio's increased focus in the Tower
Infrastructure space may weaken Indus!
positioning, brokerage firm Motilal Oswal
Financial Services said in a result update.
Inthe past one week, the stock has slipped 10
per cent following the announcement of
Financial results for the first quarter ended june
30, 2021 (Q1FY22). Telecom infrastructure firm
Indus Towers posted consolidated profit ater
tax of Rs 1,415 crore in QIFYZ2, against Rs
1,921 crore in the same quarter a year ago.
Consolidated revenue grew 11.7 per cent year-
con-year (YoY) at Rs 6,797 crore as compared to
Rs 6,086 crore in the year-ago period. Ebitda(carnings before interest, taxes, depreciation,
{and amortization) came in at Rs 3,517 crore, up 3 per cent quarter-on-quarter
(Q0Q), with Ebitda margins at 51.7 per cent (down 83 bps QoQ) due to negative
energy margins.
The management said the quarter was impacted by a cyclone in 13 circles, which
affected business and cost. The 25 per cent increase in trade receivables during
the quarter was attributable to timing issues, while the remainder was due to a
delay in payment by a customer. Indus has sufficient security cover towards t
pending amounts.
he long-term network upgrade opportunity in the telecom sector towards 56,
fiberization, small cel, and indoor coverage would continue to drive growth in
the telecom passive infrastructure industry. Recovery in tenancy adds and a
reduction in exits have also brought about stability in earnings,” according to an
analyst at Motilal Oswal Securities.
The tenancy addition for a third consecutive quarter is decent but sustainability
ahead wil be important, analysts at ICICI Securities said. "The key risk of VIU's
survival continues to remain and stretched receivables are the first sign of the
same. Moreover, while opportunities in adjacent areas (vz. small cells/smart
cities/in building solutions/active network sharing) exist, these may fructify only
over the long term,” they added.
‘At 01:40 pm, the stock was trading 4.7 per centlower at Rs 211.75 on the BSE, as
compared to a 0.93 per cent rise in the S&P BSE Sensex. A combined 7.3 million
equity shares had changed hands on the counter on the NSE and BSE so far.
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