Indus Towers Limited (NSE: INDUSTOWER) Q4 2025 Earnings Call dated May. 01, 2025
Corporate Participants:
Unidentified Speaker
Prachur Sah — Managing Director
Vikas Poddar — Chief Financial Officer
Tejinder S. Kalra — Chief Operating Officer
Dheeraj Agarwal — Head of Investor Relations Agarwal – Head of Investor Relations
Analysts:
Unidentified Participant
Sachin — Analyst
Sanjesh Jain — Analyst
Vivekanand Subbaraman — Analyst
Aditya Suresh — Analyst
Arun Prasath — Analyst
Saurabh Handa — Analyst
Kunal Vora — Analyst
Kishan Mundhra — Analyst
Chetan Sharma — Analyst
Varatharajan Sivasankaran — Analyst
Aditya Bansal — Analyst
Presentation:
operator
Good afternoon ladies and gentlemen. I am Michelle, the moderator for this conference. Welcome to India Stars Ltd. Fourth quarter and full year end date March 31, 2025. Earnings call for the duration of the presentation, all participant lines will be in the listen only mode. After the presentation, the question and answer session will be conducted for all the participants on this call. In case of a natural disaster, the conference call will be terminated. Post an announcement. Present with us on the call today is the senior leadership team of Industar. Before I hand over the call, I must remind you that the overview and discussions today may include certain forward looking statements that must be viewed in conjunction with the risks that we face. I now hand the conference over to the MD and CEO of Industars, Mr. Prachor Sa. Thank you and over to you.
Prachur Sah — Managing Director
You Michelle and a very warm welcome to all participants. Joining me today are my colleagues Mr. Vikas Burda, CFO, Mr. Tidinder Kalra, COO and Mr. Dheera Jajarwal, Head Investor Relations. On the call I am pleased to present our business performance for the quarter and year ended on March 31, 2025. We’re proud to have delivered another stellar year with our TAR and tenancy additions being one of the highest in our history. After having a record breaking performance in FY24, our inherent strengths including superior execution capabilities have helped us maintain a major share in our customers prolongs.
This in turn has led to a significant tenancy accretion from our customers. In addition to the operational performance, you are also satisfied to see a persistent engagement reap rewards resulting in this customer clearing the entire awardee amount with Rs. 51 billion being cleared in this financial year alone. Additionally, in line with our strategy of expanding our portfolio, we executed a transaction to acquire about 12,600 towers from RTH during the year before moving on to the key aspects of our business. I would like to applaud the exceptional commitment of our field team who worked tirelessly amidst the backdrop of tough environmental and logistical challenges to ensure seamless connectivity.
The quarter gone by saw the historic 45 day long Mahakom event bringing together more than 616 million devotees and we are proud to have contributed to the grand Spectacle by deploying 177 towers in collaboration with the government. This not only showcases the capabilities of Indestavas to manage the connectivity need of such a large cognitive but also reflects the greater agility of its people on the ground. The field teams also braved adverse weather conditions to install towers in Northeastern district of Tawang. Ensuring Connectivity on the regulatory front, the government continues to push reforms to support the swift deployment of telecom infrastructure, keeping sustainability in mind.
To this end, the central government made it mandatory for states to follow the Right of way rule 2024 since the start of the calendar year. These are aimed at resolving interpretation issues within the industry and ensuring efficient deployment of telecommunications infrastructure. Furthermore, the Green Energy Open Access Policy has been adopted by nearly 24 states, serving as an important catalyst for accelerating the shift toward renewable energy and enhancing overall energy efficiency. Separately, the Composite Billing Scheme, which was rolled out a few quarters ago, has now been operationalized in 11 states including Rajasthan, Madhya Pradesh and Maharashtra.
By consolidating multiple connection bills into a single invoice, the scheme simplifies billing operations and streamlines the management of large volume of accounts when it comes to 5G. Close to 40,000 5G base stations were rolled out in the industry in the last financial year with a total base now standing at close to 475,000. While the pace of deployment has moderated, 5G related loading continues to contribute meaningfully to our overall loading revenues. We anticipate that once 5G penetration deepens further, there will be a natural uptake in the port network recognition. Given our expertise in BASIL infrastructure, we are well positioned to capture these emerging opportunities.
Statistics mentioned in the Ericsson Mobility Report reiterate the rapid adoption of 5G by the customers. As per the report, global 5G subscriptions grew by 162 million in the December quarter to a total of 2.3 million, with 4G subscriptions falling by 74 million. Global 5G subscriptions are expected to reach over 6.3 billion by 2030, accounting for around 67% of the total subscriptions. In India, 5G subscriptions are expected to reach around 970 million by the end of 2030. As per the latest TRI report, the total 5G subscription base in India grew to 243 million at the end of Q3 FY25, increasing by 25 million during the quarter.
The data consumption story in the country continues to play out strongly underpinned by the continuous migration of users from 2G to 4G and the swift adoption of 5G. The average data consumed per user per month across the top three operators grew 15% year on year to 27.5 GB for the quarter ended September 2024, with the total data consumed growing by 20% year on year. Additionally, as per TRI, 5G data consumption grew 18% quarter on quarter and contributed 26.5% of total data usage in Q3FY25 compared to 22.7% in Q2FY25. As data consumption continues to soar and 5G technology becomes more ubiquitous, the requirement for passive infrastructure is expected to increase consistently to handle additional capacity and we believe that we have the expertise to meet this rising demand efficiently.
Our operational performance continues to be strong as we recorded one of our highest new tenancy additions during the quarter. Additionally, we also have acquired 12,600 towers including Lean from YHEL to tenant our tower portfolio. Further in Q4 we added 14,662 macro towers and 18,606 corresponding CO locations. Including this acquisition, our total macro towers and colocations base stood at 249,305 and 405,435 growing by 13.5% and 10% year on year respectively. On a full year basis, tower and colocation additions were at 29,530 6,800 respectively. Our industry leading tenancy ratio stands at 1.63 in terms of lean towers, colocation additions were at 2386 in Q4 including acquisition of about 2,200 towers from ATEX.
over to
This resulted in the overall base increasing to 13,870 including Lena Towers. Our net colocation additions were at 21,000 in Q4 compared to 7,700 in Q3. Following on from our operational performance, I would now like to provide an update on the progress we have made on each of our four key strategic pillars namely market share, cost efficiency, network uptime and sustainability. On market share, we are pleased to have consistently maintained the majority of the market share in the business of our major customers. Our inherent strengths focus on automation, speed of acquisition and construction while ensuring quality and safety remain the key reason for us being our customers.
Preferably, we also improved our market share through the consolidation as we acquired about 12,600 towers per meter, a single operator portfolio and offers the potential to sharing these towers with other operators during the year. We continue to make digital interventions across the value chain, strengthen our partner ecosystems and work towards improving operational turnaround time. We also leverage the government’s right of way policy to expand our reach across government lands. As witnessed in FY25, we remain focused on gaining a significant share of tenancies from all our customers which bodes well for our growth prospects. Our In Building Solution or IBS portfolio continues to show strong growth as we maintain leadership position in new rollouts for our customers.
We are pleased to see that our deployment in Q4 surpassed those in Q3 which were the highest in our history. We are confident of expanding this portfolio further. Looking at cost efficiency, we continue to focus on optimizing both operating and capital expenditure through multiple initiatives. Energy remains a major OPEX driver, particularly diesel cost through electrification of non electrified sites, deployment of energy storage solutions and a continued expansion of our renewable energy program portfolio. We further reduced the diesel consumption by 6% year on year in FY25. We also added more than 15,000 solar sites during the year taking the total base close to 30,000.
We are optimizing rental costs through targeted site prioritization, benchmarking landlord segmentation and leveraging the Gandhi Shetty portal. Furthermore, our continued efforts on technological interventions and resource efficiency is driving productivity improvement which can be seen in our network costs. On the CAPEX front, we are transitioning our battery portfolio to cost efficient media offering faster charging and longer life. In parallel, our tower portfolio is pivoting towards lighter tower variants helping lower civil and material costs. We also implemented remote monitoring technologies to enable real time site over site and data collection, supporting infrastructure rationalization and resource optimization to achieve cost savings.
Collectively, these initiatives are enabling sustained improvements in both our operating and capital cost structures on network uptime, an important metric for our customer satisfaction and quality of service. We continue to maintain a very high uptime and delivered an industry leading uptime of 99.98% in Q4.25 similar to Q3, we were able to deliver these numbers despite heavy rains and thunderstorms witnessed in areas of Karnataka which is a testament to the dedication and perseverance of our teams on the ground. Moving on to ESG which remains central to our organizational priorities. On the environmental front, we are steadily advancing our efforts to curb greenhouse gas emissions.
A key focus area has been minimizing our reliance on fossil fuels by progressively shifting our energy consumption towards cleaner renewable sources. To that end, we added more than 15,000 solar sites during the year, taking the base close to 30,000 at the end of March. Supplementing this was a strategic investment in captive solar projects under the Green Open Access Initiative as we entered into agreements with JSW Green Energy and AMPLUS for the procurement of solar power to fuel our energy needs. I would like to highlight that two years ago we committed to net zero GHG emissions by 2050 in line with SBTI science based Targets initiatives.
We are pleased to see that our near term and Net zero targets have now been validated and approved by SBTI to drive responsible practices across our value chain. We conducted ESG training sessions for more than 100 key partners to build greater awareness and alignment of sustainability standards. We continue to take initiatives to encourage the transition to electric vehicles for the business travel needs for both our employees and partners. During the year we launched our Future Earth Program in partnership with OneTeam.org through which we aim to plant 1 million trees by 2027 in order to create a sizable carbon sink for our country.
We were happy to see our efforts towards environment being recognized as transformants bestowed industries with the Great Indian Sustainable Performance in Energy Efficiency Award. We are pleased to see our gender diversity increase from close to 12% at the beginning of the year to 16.2% by March 2025. Our efforts are geared towards enabling equal opportunities for women across the board from on ground field roles to leadership positions. To that end, we launched our Women Leadership Development Program in collaboration with IIM Indore to equip our women employees with recruitment skills and behavior needed to become leadership roles in the future.
Gender diversity across the value chain is also important to us and to this end we launched a success program focusing on mutual sharing of proven strategies, best practices and success stories with partners to drive progress. On the CSR front, we carried out relief activities relating to the floods in VR supporting over 2000 lives. We are pleased to see a digital Transformation WAN initiative aimed at educating and upscaling disadvantaged individuals expanding to nine states over the year. We were pleased to see our social initiatives being recognized by multiple bodies. During the year we won The Mahatma Award 2024 for CSR Excellence and Gold Award in the Social Initiative category at Bharti Changemaker Awards 2024.
Now as part of the company strategy, I along with the Board discussed the path forward for indust. Given that now we have the backlog issue behind us, the strategy includes aggressively pursuing market share through both inorganic and inorganic routes as demonstrated by our acquisition of Bharti’s Airtel Towers. In addition, with scale of industrial, we are working on transforming our site infrastructure and leveraging digital solutions and AI to create new benchmarks of performance. This will further encourage all our customers to move tenancies to Indus. Furthermore, I’m committed to distributing the cash to shareholders and considering the discussion, the board has decided to appoint a subcommittee to comprehensively assess the modalities of distribution. I would now request Vikal to take you through our financial performance for the quarter year ended March 31, 2025 and I look forward to your questions. Over to you Vikas. Thank you.
Vikas Poddar — Chief Financial Officer
Thank you Pachor and good afternoon everyone. I’m pleased to present our financial results for the quarter and Full year ended 31st March 2025, FY25 was another strong year for us. We achieved substantial tower and tenancy additions driven by our ability to capture a significant share of our customers rollout plans. A key highlight of the year was the clearance of large portion of OD receivables from a major customer which positively impacted our cash flows and overall financial health. Turning to the financial performance for quarter four FY25 we reported gross revenues of 77.3 billion a year on year growth of 7.4%.
The core revenues from rental grew by 10% year on year to rupees 50.4 billion supported by robust tower and colocation additions on a sequential basis. Our reported gross revenues and core revenues grew by 2.4% and 4.6% respectively. In terms of profitability, reported EBITDA for the quarter stood at 44.0 billion representing a 7.1% increase year on year but a 37.2% decline quarter on quarter. The EBITDA margin was largely flat year on year at 56.9% but declined by 35.8 percentage points. Sequentially it is important to note that quarter three FY25 included a one time writeback of approximately 30 billion rupees related to the collection of overdue receivables which significantly boosted EBITDA for that quarter.
In quarter four we recorded a further writeback of Rupees 2.3 billion as the customer cleared additional dues on the Airtel Tower acquisition as you know, we completed the acquisition of approximately 12,600 towers with the asset transfer occurring in the last week of March. The acquisition is accounted as a common control transaction as per Indian accounting standards which requires assets and liabilities to be recorded at carrying value. Accordingly, the difference of Rupees eighteen billion between purchase consideration and carrying value is recognized as common control reserve. Further, the common control business combination requires restatement of financial results from the date of common control which is 19th of November 2024.
Accordingly, the quarter four financials include net loss of Rupees 1.7 billion being operating expenses and depreciation from 19th November to 31st March 2025. This impact is largely non cash in nature as the towers were operated by Airtel during this period. Adjusted for the write back and the accounting impact of the acquisition, Our EBITDA grew 12.8% year on year and 7.6% quarter on quarter. Our reported energy margins were negative 5.2% in quarter four which includes accounting impact of common control transaction as explained earlier, adjusted for this, energy margins improved to minus 2% driven by seasonality and reduction in diesel consumption.
We undertook initiatives such as deployment of solar sites and storage solutions to help us reduce our use of diesel. Profit after tax for quarter four stood at 17.8 billion, down by 4% year on year and 55.6% quarter on quarter. Excluding the affirmation one offs. The normalized profit after tax grew 19% year on year and 15.3% sequentially now onto the full year performance. For FY25, our reported gross revenues grew 5.3% year on year to Rs 301 billion and core revenues were up 8.3% year on year to rupees 192 billion. Reported EBITDA was 208.4 billion, up 41.9% year on year and profit after tax stood at 99.3 billion, an increase of 64.5% year on year.
On a normalized basis excluding one offs, EBITDA and PAT grew 8.5% and 10.1% respectively. We delivered strong returns with a reported pre tax return on capital employed of 29.1% and a post tax return on equity of 33.4% over the past 12 months. Our free cash flow generation remained robust at $38.7 billion for quarter four and $98.5 billion for the full year. The improvement in cash flow was driven by the continued business momentum and the collection of overdue receivables which also led to a $25.5 billion reduction in trade receivables during the quarter. In summary, FY25 was a year of strong operational and financial performance.
We achieved significant tower and tenancy growth driven by our customers network expansion and strengthened by the full clearance of our overdues. Looking ahead, we are well positioned to benefit from ongoing 5G rollouts, the rising data consumption and industry consolidation opportunities. So with that I’ll now hand it back to the moderator to open the floor for questions.
Questions and Answers:
operator
Thank you, thank you very much sir. We will now begin the question and answer interactive session for all the participants who are connected to audio conference service from Chorus Call. Due to time constraint, we would request if you could limit the number of questions to two to enable more participation. Hence, management will take only two questions per participant to ensure maximum participation. Participants who wish to ask questions may please enter Star&1 on their Touchstone enabled telephone keypad. On pressing Star&1. Participants will get a chance to present their questions on first in line basis to ask a question.
Participants may Please enter star and 1. Now the first question comes from Mr. Sachin from bank of America. Please go ahead.
Sachin
Hi. Thank you for the opportunity. I have two questions. First question is on dividend. There was a general expectation that once backlog from Vodafone idea is cleared, your company will start giving dividends. Wanted to know the reasons for dividend being not declared and a committee being constituted and any general thoughts that what could be a timeline when we could see a decision either on dividend or buyback coming? Related question to that is we are acquiring Bharti star 12,600 towers. So the amount roughly 20 odd billion what you’re paying to acquire these towers, will that also be constituted when you guys consider paying dividends? So that’s question number one.
Prachur Sah
Okay, so for both the questions, I’ll take the first one and maybe you can take the second one because. So as I explained in my opening remarks, I think the company had generated a significant amount of FCA for the year which was also added by the leaders in the past use. This enabled us to return a part of it to the shareholders through the buyback during the year. And as I discussed the company strategy with the board was to pursue growth both organic and inorganic. Some of that you saw in the results as well. And also to see how we can drive transformation of a size, infrastructure and level solutions.
And as I said earlier, I remain committed to rewarding the shareholders and implementing our strategy. Considering this, the board has formed a committee to comprehensively assess various viable options and place it before the board for its final approval. Now as far as the timeline is concerned, I think since the communication announced yesterday, I. I don’t believe it’s going to be a long drawn process and we’ll make a suitable disclosure once we have an update on this. As far as the question.
Vikas Poddar
Yeah. So Sachin, on the, on the question about the amount which was paid to Bharti Airtel for the purchase of towers, that will obviously be factored in by the committee in deciding whatever distribution is decided later on.
Sachin
Okay. And sorry, just to be clear that the committee is not going to take too much time to. Within three months, the decision should be done by the time you end up reporting your 1Q number numbers. Before that we should get a visibility on dividend or buyback, right?
Prachur Sah
Sachin, as I said, I’m not giving you a timeline in months or weeks. And what I’m expecting is it’s not going to be a long term process and we’ll Keep you informed.
Sachin
Okay. My second question is, you know, just wanted to understand when should we start seeing tenancy improvement now understand the incremental towers which have acquired this tower has a bit of a tenancy. But from the business which is coming from Vodafone, IDI ideally should lead to a tenancy improvement which we are not seeing in the numbers. So wanted to understand should tenancy remain range bound in the range of 1.63 to 1.65 or we should directly see that moving up going ahead.
Prachur Sah
I mean, Sachin, I’m not sure what you mean by that because if you remove the tower acquisition in Q4, we have deployed 4200 towers or 4300 new towers and the total tenancies has increased by more than 8,800. So I think that the significant tenancy addition that we have seen in Q4 and like we saw in Q3 as well. So maybe because of the addition of vehicle towers you’re not seeing the tenancy impact. But I believe the tenancy growth has been in fact a record growth in this quarter compared to what has happened in the last many years.
Sachin
And that momentum should continue going ahead. Prachar.
Prachur Sah
I think we’ll work with the customers to make sure that their network expansion plans will continue to grab the maximum share.
Sachin
Okay, thanks.
operator
Thank you. The next question comes from Sanjay Chain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, Hi, good afternoon. Thanks for taking my questions. I got a couple of them. First, starting with the dividend. The dividend policy remains intact, right? 85% of the free cash flow will be distributed to the investors. Does the method of repaying the cash is to be decided or even the dividend policy is being rethinked by the committee.
Prachur Sah
I think that what the committee is going to focus on the modality, the distribution of the cash. Right. And if there is any discussion that is going to come up on the policy as well, they look at it. But the primary aim of the subcommittee is to look at the modalities of distribution of the of the cash for shareholders.
Sanjesh Jain
And number two, we still have some debt on the book. What will be the priority in terms of cash distribution from the capital allocation perspective is to first go net debt free and distribute the remaining cash to the investor or we are okay with the small leverage on the balance sheet.
Prachur Sah
Again, Sanjish, I don’t want to preempt what the committee would decide. But what I know for a fact that as I told you earlier, I think there are multiple elements here. You said debt in addition what we have to look at is the growth ahead of us in terms of what is the capex requirements for the growth in the times to come. And this is that the committee will make a call on how the cash has to be distributed or allocated. Clear?
Sanjesh Jain
Clear. My next question is on the growth again Prachor, you mentioned in your opening remark that we will look at both organic and inorganic options to drive the acceleration in the growth. What do we really looking at in next two years in terms of in acquisition? If we have anything in mind and from organic perspective, anything in the mind apart from the normal business of passive infrastructure.
Prachur Sah
No, I think our target is when I’m talking about the growth, I’m talking about our no other towers and IBS is a growth story. So in organic, when I said in organic agreement, if there is any opportunity available to do the consolidation, we will do like we did for the Airtel towers in this quarter as far as the inorganic growth is concerned, you know, while all our customers continue to roll out towers tenancies at different speed, different quantities. And our idea is to make sure that we capture every single opportunity that is out there, whether it’s a new tower or whether if there’s an opportunity to bring more tenancies from other companies to our site.
So I think we’ll remain. So when I’m talking about growth, I’m focusing on the tower growth which we have seen substantial growth over the last two years and we want to make them keep the momentum going in the coming year as well.
Sanjesh Jain
Got it, Got it. On the. On the industry growth itself.
operator
To interrupt you sir. Mr. Chair, I would request you to rejoin the queue for follow up questions as there are other waiting others waiting for their turn.
Sanjesh Jain
Fair enough. Thanks. Thanks for allowing me. Best of luck.
operator
Thank you. I request to all the participants to kindly limit their questions to two per participant. Should you have a follow up question, please rejoin the. Thank you. We’ll take the next question from Mr. Vivekanand Subraman from Ambit Capital. Please go ahead.
Vivekanand Subbaraman
Yeah, thank you for the opportunity. At the time of announcing the purchase of towers from Airtel, you had mentioned that you will take loans to fund this transaction. Just to understand this better, in your balance sheet I see that the borrowings are flat on a sequential basis. Does this mean that the transaction has not been funded with debt? That is question one. And secondly I think to Sachin’s question on dividends, I think Vikas, you said that the Airtel transaction will also be a consideration for payment of dividend. Why is that the case? Because it seems to contradict what you said in the press release when you announced the purchase of towers.
Thank you.
Vikas Poddar
So to answer that broadly, the intent is to, you know, fund the tower acquisition through borrowing. But because we have substantial collection in this year, we use that to basically purchase the towers. But it should be seen more as a timing issue. So as and when the distribution decision is made, whatever is required will be done at that point of time in terms of borrowing.
Vivekanand Subbaraman
Okay. And on my second question which pertains to dividends, will the amount that was paid out to Airtel, will it be available or has it already been earmarked for that purchase? So now it is not available for distribution. Just to clarify that. I know the committee is still evaluating it, but because you had specifically called out that this transaction will be debt funded, we thought that this money is available for dividend distribution.
Prachur Sah
But I think, as Vikas mentioned earlier, I think it will be. It’s purely a timing issue. The intent is to fund the transaction to borrowing. So it’s purely a cash management and that was done.
Vivekanand Subbaraman
All right, that’s clear. Thank you so much. Thank you.
operator
Thank you, sir. We’ll take the next question from the line of Mr. Aditya Suresh from Macquarie. Please go ahead.
Aditya Suresh
Thank you and good afternoon. Two questions. First is can you give us an. Update on the industry structure in particular? Kind of. I’d be curious to see what you’re seeing on the ground with Summit and etc combining operations.
Prachur Sah
I mean, to be honest, I’ve answered this question earlier in the previous calls as well. I mean, I don’t think it impacts as much because the structure remains the same. It’s the entity that has changed. So from modus operandi I don’t see much change. I think, and I can speak for industrial, I think our focus remains to make sure that we remain in the market leader in terms of grabbing the market share that is out there. But from an industry structure point of view, we don’t feel any change per se. With this change, there’s no migration which you’re seeing.
Aditya Suresh
Is that a fair understanding?
Prachur Sah
Yeah, we only see positive migration towards Indus.
Aditya Suresh
The second question is on the tower rentals per operator, which you’re connecting. Right. So despite the increased 5G loading, despite the inflation embedded in the contracts, we’ve seen that moderate. Right. So in the context of kind of what you said about this aggressive market share capture plans, plus noting that kind of, I appreciate that if a second operator kind of comes into these towers, all operators get a discount. How should we directly think about your rental revenues per operator trending.
Vikas Poddar
I’ll take that Aditya. So see as far as the ARPT is concerned like we have, you know, while we report this as a KPI but we have always maintained that there are several variables that impact this KPI. If I just maybe you know, as a reminder, talk about some variables, you know, first of all there is a product mix. There are towers which are, you know, traditional towers which are more expensive in terms of rentals. There are towers which are less, you know, costly. Then there is also the, the other thing, other variable which is the standard escalation that kicks in every year.
There are loading, you know like 5G, 4G etc. Which are, you know, different. On each tower there’s a renewal discount. There’s also sharing discount. So as and when, let’s say you will see the co location increasing or the sharing increasing which was the case in quarter four with you know, a lot of the vil rollouts, there’s obviously a sharing, you know, discount that kicks in right in the infra business that we are. So all that basically impacts the arpt. The other technical point that you need to keep in mind is the acquisition that happened was in the, pretty much in the, toward the end of the year, right in the last week of March.
So while that sits in the tower numbers and the tenancy numbers but when it comes to arpt, obviously that has a bearing in terms of the mathematical calculation, right? So that dilutes the ARPT simply by virtue of being there in the denominator. So I think broadly, I mean while this metric does indicate the trend but you know, with several moving parts it’s very difficult to really, you know, try to reconcile this with the revenue growth. Does that help? Aditya?
Aditya Suresh
Yeah. Thank you Vikas. Thank you for the clarification.
operator
Thank you. The next question comes from Mr. Arun Prasad from Eventus Park. Please go ahead.
Arun Prasath
Thank you for the opportunity. Good afternoon everyone. In your opening remarks you mentioned that There is roughly 40,000 5G towers added during the year in the industry. Can you talk about more qualitatively on this where this was done and what kind of a towers was done and similar kind of attributes in these 5G towers.
Prachur Sah
See when I talked about the 40,000 it was not towers, it was base stations. So I think it’s not a 5G comes in form of loading at our towers as additional technology. So the addition is actually more on the technology side on an existing tower, not a separate tower.
Prachur Sah
Oh okay. Okay. So as such there Is the infill. Towers for 5G it’s not started on a broad basis?
Prachur Sah
No, I don’t think that it’s not started yet. So once first the operators still need to have a full 5G coverage and then depending upon the data capacity needs we’ll see, I mean happened in the 4G times probably we’ll see in the 5G times as well.
Arun Prasath
Okay, is there any instances where operators have felt congested in certain clusters and and adding infiltrators is that started in certain clusters or it’s, it’s, it’s largely they are having lower utilization at a cluster level?
Tejinder S. Kalra
See, we would not be able to comment on the utilization of per cluster for the operators. We certainly see data growing and obviously that’s the reason why coverage and capacity infilled sites are continuing to grow. But of course as the operators feel congested in any clusters, they certainly would come back at and ask us to put up either new towers or they’ll roll out more capacity on the same site. But that’s a continuous thing that is yet happening.
Arun Prasath
Okay, actually I’ll just rephrase the question. So as and when the certain clusters grids congested, is it the tendency to put more say equipment in the existing towers or are they reached situation where they are thinking about the new infill towers?
Prachur Sah
I think it’s a combination. I think I can’t, you know, we can’t comment from an overall strategy for each operator, but I think it’s a combination. Wherever possible they would add on the same tower and wherever there is like last year or the year before last there was a significant additions of lean towers and that probably served the purpose of infill to an extent.
Arun Prasath
Okay, okay. All right, thank you so much.
operator
Thank you. The next question comes from Mr. Saurabhanda from Citigroup. Please go ahead.
Saurabh Handa
Yeah, thank you for the opportunity. I had two questions. Firstly again just to clarify on the dividend bid, so your free cash flow in the fourth quarter was 39 billion. This obviously does not include the consideration for the tower acquisition which was 18 billion. So if I take, I mean what would be the number you would consider for dividend payout? Would you take 39 billion or would you take 39 minus 18, which is 20 billion. So assume your policy remains to pay out 100% of free cash flow. Just wanted some clarification because I think I’ve been a bit confused because previously all I said that the acquisition would be completely debt funded and therefore not have a bearing on shareholder returns.
Vikas Poddar
Sourav if I take that question, I think this pretty much we tried to address and explain, you know, in the first round itself when Sachin had raised a very similar point. You know, so while from a cash management perspective and because, because we have generated a very healthy cash in quarter four as well as on a full year basis, we have used that cash to fund the acquisition, which obviously will lead to long term growth and all that. And like I said, obviously the committee will take into consideration all these things. They will obviously look at the free cash flow generation and then decide the distribution modalities and the amount, etc.
And like I said, the fact that any acquisition, etcetera, or any inorganic growth needs to be funded through debt or leverage is basically more like a timing thing because there was, you know, surplus available. We use that. But we are open to sort of leverage in future, depending on whatever addition gets taken.
Saurabh Handa
Okay, sure, sure. And just my second question, you spoke about the ARPT being impacted by the denominator, which makes sense. So in fiscal 25, the ARPT, which was 40,008,56, what would be the number if you hadn’t adjusted for the acquisition? I’m just trying to get a sense of, say compared to the previous financial year. I think the number you declared was 41, 198. So what would that number be?
Vikas Poddar
Now see, the number that you see is roughly a 1.1% growth sequentially. That probably without the acquisition would have been something like a two and a half percent growth sequentially.
Saurabh Handa
Okay, so even the ARPT of that 41,893 includes the acquisition?
Vikas Poddar
Yeah, that includes the acquisition. Because like I said, we included those sites in our overall portfolio in the last week of March. So as on 31st March, that was sitting in the portfolio and hence the calculation.
Saurabh Handa
I’m sorry, you said that would be how much without it? 2.5%.
Vikas Poddar
Roughly two and a half percent, sort of.
Saurabh Handa
Okay, got it, sir. Thank you so much.
operator
Thank you, sir. We’ll take the next question from Vivekanand Subraman from Ambit Capital. Please go ahead.
Vivekanand Subbaraman
Yeah, I have a couple of follow ups. So number one is on the new composite billing scheme that you have rolled out earlier. You were mentioning about a very different kind of energy contract model. Fixed energy model versus reimbursement. Is this composite billing in the nature of the fixed energy model? Can you please elaborate on how this could potentially influence your energy margins in the long term? That is question one. Secondly, based on your conversations with telcos, how is the fiscal 26 capex outlook looking like for you?
Prachur Sah
So on the first question I would like to clarify when I was talking about composite billing it was not composite billing for billing to a customers it was a composite billing from discoms for our sites. Because we have distributed assets we get bills for individual towers. So what we had been trying with the government to see if we can get a composite bill in a given state that make the transactions a bit easier and much simpler to manage. So the composite billing was not from our customer point of view it was it is a government initiative to provide composite billing to large users so that they can have the billing settlement and things easier to do.
So that’s the clarification of the composite billing. What was the second question? See I think as I told FY26 I think we remain confident that FY26 will also connect to a strong year of growth. While I can’t comment specifically on what the operator plans are but I believe our order book is quite strong that I’m seeing currently.
Vivekanand Subbaraman
Yeah just on that one small follow up we saw that the capex has declined by around 24% in fiscal 25 versus 24 and this trend has been pretty much intact through the quarters. So should we take fiscal 25 as a new normal for capex or will it further go down from here?
Prachur Sah
Again you know I don’t specifically talk about any numbers. You know if you. This year we had a significant tower rollouts and tenancy rollouts as well. Obviously higher, the tenancy is lower, the tenancy is not the same cost as putting a new tower. So I don’t want to say what specific trend you would see but all I can say the tower and tenancy growth will remain strong in the coming year.
Vivekanand Subbaraman
Okay, thank you so much and all the very best.
operator
Thank you. The next question comes from Mr. Kunal Bora from BNP Pariba. Please go ahead.
Kunal Vora
Yeah, thanks. First is maintenance capex seems a little higher this quarter. Any reason for that?
Prachur Sah
Yeah, I mean if I can answer. See typically if you see quarter four is the time where we are setting ourselves for monsoon as well. So I think typically the maintenance capex every year Q4 sees a little bit of a jump because we are, this is the time post monsoon in fact Q3 and both Q4 and Q1 typically sees a higher number than the middle two quarters because post rain is when you can start seeing to go to the site and start deploying the the infrastructure to get ready for monsoon or do whatever replacements you have to do.
So it’s Not a. It’s not Q4 specifically, it’s generally how the maintenance happens.
Kunal Vora
Energy margin. What I understood is there is a one off impact because of budget looks higher but Otherwise normalized it’s 2%. How are you looking at it going forward? Around 2% range or.
Vikas Poddar
Well, Kunal, I think so. I mean if you look at our energy cost, the energy cost is being managed pretty well. We have been running various initiatives like solar deployment, reducing diesel consumption, etc. Even batteries, as we mentioned earlier in the discussion today, replacing our old batteries with new lithium ion batteries which are more energy efficient and so on. So you see a lot of control on the cost.
However, there are basically reconciliation issues and recovery issues which is something that we are trying to sort out and hopefully. And the other thing is of course the Q4 number should not be seen as a benchmark simply because there is always a lot of seasonality in the energy business. Right. So somewhere we will try to improve this going forward, but it’s very difficult to put a number to this.
Kunal Vora
And on rental revenue on the way forward, how do we look at it like fourth quarter, the new tower rental. Revenue did not come in. Right. Or at least like it came. Very, very small proportion of that would have come. So in 1Q we should see a. Full reflection of the new tower.
Vikas Poddar
Yeah, you’re right. So that’s how it works. I mean typically whatever rollouts happen in the quarter, the full, you know, quarterly impact of that is visible only in the following quarter quarter. So just bear in mind
Kunal Vora
I was talking about Acquired Towers and not the.
Vikas Poddar
Yeah, Acquired Towers has few days of revenue in this quarter but of course the next quarter will reflect the full quarter revenue.
Kunal Vora
Understood, but in that case what was the driver of rental revenue this quarter? 4 and a half percent quarter on quarter is a recent number.
Vikas Poddar
So broadly I would say two drivers, Kunal.
One is of course the healthy tower and 10 tenancy or CO location additions that we have done. So that of course will keep driving. The other important driver is also, you know, whatever loading growth we get through 5G etc. Plus the annual escalations. So all these are basically driving. And then of course quarter four being end of the year, you know, there are also some reconciliation benefits that are there sitting in the quarterly numbers. So all this has basically driven the roughly 4, 4 and a half percent top line or the core revenue growth that you see.
Kunal Vora
Any part of that would have been one off. When. How do we think about.
Vikas Poddar
There is, there is, there is a one off which is roughly let’s say 2.1 percentage point sequentially. So that is basically like I said the year end reconciliation benefits that are reflected in this quarter.
Kunal Vora
Understood. That’s it from me. Thank you.
operator
Thank you. Sir. The next question comes from Mr. Kishan Mundra from Dam Capital. Please go ahead. Hi sir.
Kishan Mundhra
Thank you for taking my question. Just have one question. So in the previous quarter you had announced your foray into EV charging infrastructure. So just wanted to understand if you have firmed up any plans on that front. And. And what is your capex that you expect to put into this business over. The next two years?
Prachur Sah
Krishnan, I think as I explained in the last earnings call as well what we started to look at is the commercial pilot for the EV business. And based on the pilot results and if it gives us scale then we would consider whether we want to expand or it’s something that will hold back. So I think currently we’re evaluating that, that that pilot and if it offers some scale then we’ll have a discussion. But if not, I think our focus will remain on the tower. So we’ll keep you posted on any decision on that front.
operator
Thank you. The next question comes from Chetan Sharma from Systematic Shares and Stocks limited. Please go ahead.
Chetan Sharma
Thanks for the opportunity. Am I audible sir? My question regarding the. The potential partnership between the Stalin and the telecom GS like tell you and the question is that what will the role of the future the traditional towers. Could this collaboration render the tower?
Prachur Sah
To be honest I think it’s a question, a good question but. However as of now based on our discussions with the telecom operators and in general I think there are limitations and commercial constraints as far as the satellite technology is concerned. So we don’t see that risk on a terrestrial network in the foreseeable future. And I don’t expect that impacting to us anytime soon.
operator
Mr. Sharma. Thank you. The next question comes from Mr. Vartarajan sir. Sankaran from Antique Ltd. Please go ahead.
Varatharajan Sivasankaran
Thank you for the opportunity. Sir, at one point in time discussed about the possibility of entering into the. Infrastructure like data centers. Is there any kind of a discussion on that? Do you see something like that happening in the future?
Prachur Sah
Honestly speaking, I don’t think we ever discussed. I don’t think. Sorry, I don’t think we discussed data center from our side. There was some speculation done in media. So I think that was a very speculative article that had come out. So I don’t think we have discussed that as an option currently because our focus Remains on the tower growth primarily. So. So as of now data center is not under consideration. So you have any further questions?
Varatharajan Sivasankaran
No, I’m good. Thank you.
operator
Thank you. We’ll take the next question from Mr. Sanjay Jain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, because I got just one clarification. There is a line item in the cash flow which talks about the consideration paid for the acquisition of passive infrastructure of 1800 crore. This I thought is a payment for the Airtel data was we bought, correct?
Vikas Poddar
That’s right, Sanjish.
Sanjesh Jain
Because in many instances we told that we haven’t paid this consideration. I. I saw that it’s been paid, right? There’s nothing pending to be paid to the Airtel from this perspective, right? Only Hexacom deal is yet to be consummated. Is that understanding, right?
Vikas Poddar
That’s right. That’s right.
Sanjesh Jain
Got it. Thanks. That’s. One second, Prachu. I was just asking a question before I got connect disconnected. So if you look at the growth on the data side, it has materially decelerated despite FWA one of the largest operator has reported under 20% growth on the data. The data consumption really showing pattern of saturating and minded. This is despite 5G being unlimited today. Once it capped I think things may get only lower on the growth side. Do you think the demand for tower itself see a material decline? And now that we have created so much of capacity on 5G do you think the growth.
Because again if you look at industry wide the tenancy addition has materially slowed down in last one year. Any any reason to believe that the growth will continue on the tenancy addition? Apart from Vodafone helping to up their coverage on 4G and 5G.
Vikas Poddar
Obviously ACS, our business is not infinite. But if you see for the last two years, last year we added what 35,000 tenancies. This year we are writing another 35,000 tenancies or somewhere around that number. So from a year on year basis our tenancy has remained elevated for the last two years. Now of course this cannot be a permanent status. But as the urban periphery expands, as the rural areas get more. For us also our opportunity is to create lower cost solutions for the customer. So that some of the towers which may not be viable in the past can now become viable.
So I think growth is for us to see how we can push the boundaries in terms of what we can offer to the customers. So some of the towers can become more viable for them at a lower revenue as well. So I think so while you Know, the organic growth may see limitations but I still believe the next year or so will remain strong given the fact that the other customers are catching up to the network expansion. But at the same time we’ll continue to push the boundaries in terms of how we can create better solutions for the customers to come. Create more towers and tendencies which were earlier. Not possible.
Sanjesh Jain
Clear. Clear. One, one, one. Data keeping. Last question. Because you said that we have consolidated or restated the numbers from 19th of November, that means the acquisition should have ideally reflected the full quarter impact, right?
Vikas Poddar
Not so it reflects the full quarter impact as far as the costs, OPEX and depreciation is concerned. Sanjish, it is not a billable quarter because the operation handing over happened in the last week of March. So from a revenue perspective it will be reflected in the next quarter.
Sanjesh Jain
So we have booked all the cost, not the revenue. Got it. Got it. So the cost and depreciation have been accounted for but not the revenue.
Vikas Poddar
Yes, this is as per the Indian accounting standards between group entities, if there is a common control business combination then the reinstatement of financials needs to happen from the date of common control.
Sanjesh Jain
That’s very clear. Thanks. Thanks for answering all those questions. And again, best of luck for the coming quarters.
Vikas Poddar
Thank you.
operator
Thank you. We’ll take the next question from Mr. Aditya Vardhan from Utilal Oswal, please go ahead.
Aditya Bansal
Yeah, this is. This is Aditya Bansal. Thanks for taking my question. So just wanted to understand the ARP profile currently for the towers acquired from Airtel. Like what would it be in the next next year? What should we take?
Vikas Poddar
See, the towers acquired from Airtel as of the acquisition date or the. Or the year end date are largely single tenancy towers. Right. So they will have the ARPT or the revenue in line with the MSA for single tenancy. So as and when we get more tenancy then obviously you know there will be some some growth in terms of overall revenue for the tower and so on. But for the time being they are reflecting largely the single tenancy revenues
Aditya Bansal
Which circles would this be pertaining to? And is there opportunity to have an incremental tenant here?
Vikas Poddar
So they are across the country pretty much in. In all circles. And of course there is an opportunity which we’ll be working on.
Aditya Bansal
Thanks a lot. Thank you.
operator
Thank you. Ladies and gentlemen, we will now conclude the question and answer session. I would now like to hand the conference back to Mr. Prachor SA MDN CEO for closing comments. Thank you. And over to you sir.
Prachur Sah
Thanks. Michal in summary, FY25 marked another strong year for Indus Towers, driven by Rovers Tower and Tenancy Additional as we retained a significant share of our customers network expansion. Equally important, a major customer cleared its large overdue payments during the year, aiding the generation of strong cash flows. Notably, our customers are continuing with their rollout activities, providing us with an opportunity to secure a substantial share of their rollouts. We will continue to work towards strengthening our market leadership position through participation in customer rollouts and investing in strategic strategic opportunities. Thank you and have a good day.
operator
Thank you members of the management. Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. Thank you for connecting to audio conference service from Chorus Call and have a pleasant evening. Thank you so much.