On Thursday, Indus Tower reported a weak financial performance for the September quarter which can be attributed to collection challenges faced by the company from its clients. In the September quarter, the company’s consolidated net profit fell 44% year-on-year to INR 872 crore, whereas its revenue from operations rose 16% y-o-y to INR 7,967 crore. Sequentially, the company’s net profit rose 83%, whereas revenue rose 15.5%.
On a y-o-y basis, the fall in net profit was due to provision of doubtful debts amounting to INR 1,771 crore made by the company during the quarter. While the company did not name the company for which it has created the bad debt provision, it is likely for one of its key customers — Vodafone Idea — which owes it about 7,000 crore. In the preceding quarter too, the company made a one-time provision for doubtful debts worth INR 1,230 crore. Vodafone Idea has also asked Indus Towers for softer payment terms and proposed to pay part of the amount to be billed till December 31, 2022, and 100% of the said amounts billed from January 2023.
The company’s EBITDA fell by 23% on Y-o-Y basis. The margins expanded by 160 basis points sequentially, which can be attributed to increase in revenues. Owing to weak collections from the clients, operating cash flows in the September quarter fell 39% y-o-y to INR 1,277 crore.
In its board meeting, the company also approved raising of up to INR 2,000 crore by way of issuance of non-convertible debentures (NCDs) in one or more tranches on private placement basis, it said.