INDUSTOWER - INDUS TOWERS LIMITED Share Price

Management's outlook for Indus Towers Limited emphasizes continued growth driven by strong customer capex plans and increasing network expansion activities, particularly in the context of 5G. They noted a healthy increase in tenancy additions, specifically from major customers, reflecting an encouraging trend in network investment as the operating environment stabilizes.

Key forward-looking points include:

1. The overall revenue for Q3 2025 rose by 7.9% year-on-year to INR 81.5 billion, with core rental revenues up 9.5% year-on-year to INR 52.7 billion.
2. The management highlighted a significant increase in colocation during the quarter, with 6,105 corresponding colocations and 3,548 macro tower additions, achieving an incremental tenancy ratio of over 1.7x.
3. For 5G, the overall number of 5G base stations has surged to nearly 520,000, which positions Indus Towers well to cater to the rising demand as data usage continues to grow.
4. The company aims for a 10% growth in tenancies and towers and plans to maintain a stable increasing trajectory despite the acknowledgment of potential growth moderation in the future.
5. Capital expenditure (capex) remains disciplined, with an emphasis on energy efficiency and digital investments, targeting around INR 7,500 crores annually for the next 2-3 years.
6. The management is motivated to leverage the strong order book, predicting sustained tenancy growth and a strategic focus on customer relationships and service reliability as competitive differentiators in the market.

Overall, management expresses confidence in sustaining long-term growth and shareholder value, bolstered by an efficient operational approach and a robust market presence.

Q&A Section of Indus Towers Earnings Call - February 3, 2026

Question 1: Vivekanand S. (Ambit Capital): How long will this revenue growth sustain given that now you would have some visibility of the capex plans of all your key customers?

Answer: From a macro perspective, our tenant growth has been robust. While FY25 was an extraordinary year, we're seeing continued demand supported by our strong order book. I can't provide specific numbers for revenue, but we expect ongoing growth driven by both tower and tenancy expansions, alongside a stable order pipeline.

Question 2: Vivekanand S. (Ambit Capital): How do you see the capex intensity of the business heading into FY27 and FY28?

Answer: Capex will be influenced by maintenance and growth needs. While FY24 was unusual, capex for FY25 and FY26 has seen steady levels. As long as growth opportunities exist, our capital spending will remain significant but will ultimately moderate once growth slows and becomes more focused on maintenance.

Question 3: Rishabh Dhancholia (HSBC): Are these margin levels sustainable, and what would be the key drivers?

Answer: While Q3 showed strong margins, they included seasonal benefits, especially in energy. We are working on digital interventions and operational efficiencies that should sustain margins longer term. It's important to view them over a more extended period rather than on a quarterly basis.

Question 4: Sumangal Nevatia (Kotak Securities): What is holding us back from resuming dividends, and will there be a reconsideration post-budget?

Answer: Our board is committed to shareholder distribution. We plan to evaluate performance during the Q4 meeting, considering new changes from the budget. However, no comments can be made until those discussions occur.

Question 5: Aditya Suresh (Macquarie): What are the changes you're seeing in your tenancy market share, particularly with competitors becoming more aggressive?

Answer: We are offering competitive solutions to our customers and remain focused on operational efficiencies and uptime. While competition exists, our strategy aims to maintain our market leadership and capture maximum market share.

Question 6: Sanjesh Jain (ICICI Securities): How do you see energy losses narrowing down over the next 2 years?

Answer: We're actively working to reduce inefficiencies in energy operations, transitioning from diesel to cleaner sources. While I can't assign a specific timeline, improvements will occur as we implement our initiatives effectively.

Question 7: Gaurav Malhotra (Axis): Is the focus on organic growth in Africa purely by design, or are there limited acquisition opportunities available?

Answer: Our strategy prioritizes organic growth to establish a competitive foundation. Should suitable inorganic opportunities arise that align with our valuation criteria, we might consider them, but the focus remains on building from the ground up.

Question 8: Aditya Bansal (Motilal Oswal): Can you provide updates on migration contributions this quarter?

Answer: While I can't give specific numbers, our goal is to enhance operational performance and offer competitive value propositions to incentivize customers to shift to Indus. Any churn is often offset by new tenancies as we optimize locations.

This format summarizes the Q&A section from the earnings call, maintaining clarity and detail regarding the questions and respective answers while adhering to the character limit.