Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Indus Towers Limited (NSE: INDUSTOWER) Q4 2026 Earnings Call dated May. 01, 2026
Corporate Participants:
Prachur Sah — Managing Director and Chief Executive Officer
Vikas Poddar — Chief Financial Officer
Analysts:
Unidentified Participant
Sachin Salgaonkar — Analyst
Vivekanand S — Analyst
Sanjesh Jain — Analyst
Saurabh Handa — Analyst
Vedant Sarda — Analyst
Presentation:
Operator
Ladies and gentlemen, I am Michelle, the moderator for this conference. Welcome to Indus Towers Limited Fourth Quarter and Full Year Ended March 31, 2026 Earnings call for the duration of the presentation all participant lines will be in the listen only one. 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 Indescribable.
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 over the call to our first speaker of the day, Mr. Tatul Saha. Thank you. And over to you Mita Sah.
Prachur Sah — Managing Director and Chief Executive Officer
Thank you Michelle and a very warm welcome to all participants. Joining me today are my colleagues Mr. Vikas Podar, CFO, Mr. Tejinder Kalra, CEO and Mr. Dheera Jagrawal, Head Investor Relations. On the call today I will talk about our business performance for the quarter and year ending on March 31, 2026. FY26 was marked by strong colocation additions and continued tower additions reflects our strong execution capabilities Exceptional service to our customer underpins our competitiveness Strength to capture a meaningful share of customers Network expansion Gradual improvement in the financial position of a major customer aided by the government support provides visibility of strong business momentum.
Overall, FY26 was another year of solid progress with strong operational and financial performance. With the improved financial situation of one of the customers and the potential business momentum the Board has recommended final dividend of Rupees fourteen per share before delving deeper into our business performance I would like to acknowledge the exceptional commitment of our field force whose ability to overcome geographic and climatic challenges enables consistent delivery of reliable round the clock connectivity nationwide.
During the quarter, parts of Northeast experienced severe weather conditions which significantly disrupted the movement of our on ground workforce. Despite these challenges, our field teams acted swiftly to restore services stabilizing connectivity and effectively preventing any major disruption. On the regulatory front, the Ministry of Finance introduced incentive link schemes to encourage States to align with the RoW Rules 2024 with an allocation of Rupees 4000 crores to states the scheme is expected to accelerate approvals and ease deployment bottlenecks.
The Green Energy Open Access Policy has now been operationalized across all states reinforcing the sector’s transition towards cleaner and more sustainable energy sources. This is expected to help reduce the energy cost for tower coast. Additionally, Central Electricity Authority has notified the Installation and Operations of Meters Regulations 2026 Mandating Smart Meters for all customers in areas with communication networks. In this context, we are actively collaborating with stakeholders at both central and state levels to deploy smart meters across our cities which will enhance operational efficiency, optimize energy costs and enable more granular scalable billing mechanisms.
Moving up to update on 5G networks the installed base of 5G BTSs now stands at close to 531,000. As large scale deployments stabilize, rising data demand and network densification are giving the need for incremental capacity on existing infrastructure supporting sustained loading LED revenue growth over time. This is also expected to be complemented by selective expansion of the tower footprint backed by strong customer relationships and a robust operating platform. Indus Towers is well placed to capitalize on these opportunities and support the evolving requirements of next generation networks.
As per the latest TRI report, the total 5G subscription based in India stood at over 391 million by the end of December 2025, growing by 30 million in Q3 FY26. India’s data consumption momentum remains robust driven by the continued migration of users towards 4G and 5G. As per Trai’s latest publication, total data consumption and average monthly data usage per user grew by 29% and 21% year on year respectively. According to Trai, 5G usage alone grew 21% quarter on quarter, accounting for 40% of the total data traffic in Q3FY26 up from 35% in Q2FY26.
Continued growth in data usage is encouraging operators to enhance capacity across existing infrastructure. With a Pan India presence with expansive tower portfolio and a strong execution track record, Indus Towers remains well positioned to partner with customers in meeting their evolving network requirements. In terms of operational performance, we registered strong colocation additions during the quarter driven by pickup by the customers, network expansion and our ability to capture a major share of the customer Solouts.
We added 4,892 macro towers and 6,192 corresponding colocations during the quarter, translating into a year on year growth of 6.5, 6.1% and 5.6% in tower and colocation base respectively. As a result, total macro tower and colocation stood at around 264,000, 500 and 428,000 respectively. On a full year basis, tower and colocation additions were around 15,222 500 respectively. Our industry leading tenancy ratio was stable at 1.62. Our co locations of Lena Towers stood at more than 14,000. Including Lena Towers, our portfolio stood at approximately 442,000 at the end of the year.
I will now provide an update on our key KPIs. We remain committed to reducing diesel consumption by transitioning to cleaner sources of energy. We added close to 2500 sites with solar access during the quarter, taking the overall sites to about 42,400. Diesel consumption on our sites reduced by about 7% year on year in Q4 FY26. This is despite 6% year on year increase in colocations and continued equipment loading on the sites navigating extreme weather conditions. The dedication and perseverance of our teams on the ground helped us deliver an industry best of time of 99.977% in Q4FY26.
Let me now move to our strategic pillars market share, cost efficiency, network uptime and sustainability. On market share we continue to strengthen our position. We remain preferred partner for our key customers that enables us to capture a significant share of the network rollout. Network expansion was robust across major customers allowing us to improve our market share in new deployments. Our ability to deliver reliable service at competitive rates supported by strong execution and stringent quality standards has been central to this performance.
Targeted technical interventions and customized product offerings have further contributed to cost optimization and improvement in overall delivery in our non tower segment. We achieved leadership position in the ibs space in Q4. Our DAS business also saw a pickup with increased deployments in metros, tunnels and highways. With a focus on build to suit solutions and continued technological advancement, this segment is well positioned for further growth. Cost discipline and operational excellence are embedded in our ways of working.
With a continued focus on improving efficiency, enhancing predictability and structurally resetting our cost base, we made targeted interventions across tower strengthening civil and electrical works, supply chain, LED cost optimization and partner scope rationalization while ensuring site safety and service reliability. Energy efficiency is a central driver of cost reduction efforts. During the year we scaled deployment of energy efficient solutions including broader solar integration and accelerated deployment of advanced battery technologies.
Over the last two years. As mentioned earlier, we have ramped up our solar deployment and provided solar access to about 28,000 sites during this period. We have also progressively increased the share of lithium ion batteries across our portfolio. These initiatives are structurally reducing diesel dependency, improving uptime and supporting a more resilient and lower cost energy framework. We also continue to strengthen our approach towards CAPEX management, financing cost discipline, standardizing tower cost and tightening execution controls across tower deployments.
Thirdly, service reliability remains a core priority with continued focus on maintaining industry leading standards across our operations. We are leveraging advanced digital tools and data platforms to enhance service delivery by the way of enabling faster issue resolution, implementing a more proactive data driven approach to address customers needs. FY26 must step up in a digital and AI led transformation. For example, over 85% of our sites are now digitally connected covering key systems such as fuel sensors, backhaul monitoring, smart meters and equipment among others.
The deployment of AI and machine learning capabilities have enabled proactive identification of outages, automated root cause analysis and improved resolution effectiveness. Initiatives such as AI based voice agents for technician calling and computer vision led validation of preventive maintenance activities have enhanced field productivity, standardization and compliance while delivering high levels of accuracy. Energy management, as mentioned earlier, remains an important area to focus with the implementation of an end to end automated fuel management platform enabling real time planning of diesel usage, logistics optimization and field validation.
These interventions are improving cost efficiency and operational control. In parallel, we have progressed our digital twin journey through site service image platform, enabling planning teams with a unified view of site to optimize asset utilization and improve civil and electrical planning. We are progressing well on our ESG agenda as well. During the year we undertook a double materiality assessment and a comprehensive climate risk assessment across our operations, enhancing our understanding of physical and transition risks and embedding resilience into long term planning.
Following the approval of our near term and Net zero Targets by Science Based Targets Initiative sbti we we have formulated our decarbonization roadmap to guide progress towards these commitments. On the workplace, gender diversity improved from 16.2% in FY25 to 18.3% in FY26. During the year we launched our Digital Leap program to advance digital and AI capabilities across the organization. We also launched predna, a women led mentoring program to inspire and uplift women employees. We undertook campaigns and targeted training focused on road safety and technicians working at heights in csr.
As part of our flagship program Saksham in association with the Bharatiyatel foundation, we have supported over 30 Satya Bharati schools and 1100 government schools across multiple states and Union territories under the Quality Support Program. Additionally, our digital transformation van has touched over 646,000 lives in FY26. As part of our other flagship program Pradati, we we conducted disaster relief measures across the nation, positively impacting close to 3000 households. Through these programs we managed to touch around 33 million lives by end of FY26.
On the governance front, we maintain high levels of governance integrity and transparency to drive ESG adoption across our value chain. We instituted the ESG Pathfinder Awards with the objective of recognizing who have demonstrated meaningful commitment towards advancing sustainability initiatives. Our CSR efforts throughout the year were recognized by multiple bodies as the company was awarded the Mahatma Award for CSR Excellence and recognized for sustainable and responsible business amongst the others.
I will now provide a brief update on our progress on Africa expansion. We are making steady progress on Africa 4A with key operational and structural building blocks largely in place across our target markets. In Zambia we have secured the operating license and are now advancing on ground execution. In Uganda and Nigeria we are in the last stages of getting regulatory approvals. Commercial frameworks are largely established with the primary customer and initial orders are in place in parallel. We have made good progress in setting up supply chain ecosystem, strengthening operational readiness, positioning us well for efficient and scalable deployment.
We expect the rollouts will begin soon and will ramp up progressively as approvals come through. Overall, our strategy in Africa remains It’s a long term strategy and remains to create differentiation through better cost per tower, delivering better SLA uptime and higher energy efficiency. By doing this and remaining competitive commercially in line with the local market, we believe in long term to be a major player in Africa tower business. Geopolitical developments due to the war in West Asia have created near term supply side disruptions impacting tower availability, deployment timelines and cost structures primarily through energy supply constraints and input cost inflation.
We continue to monitor the situation closely and mitigating actions are being taken in line with the evolving geopolitical and market conditions. With regards to rewarding the shareholders, we are pleased to announce that the Board has recommended a final dividend of Rupees fourteen per share reflecting our commitment towards returning cash to shareholders. As was informed earlier, the Board considered and decided to resume shareholder payouts while remaining aligned with a disciplined capital allocation approach and ongoing investment priorities.
The endeavor would be to follow a steady and progressive distribution. I would now request Vikas to take you through our financial performance for the quarter and year ending March 31, 2026 and I look forward to your questions. Over to you Vikas. Thank you,
Vikas Poddar — Chief Financial Officer
Thank you Prachod and good afternoon everyone. I’m pleased to present our financial results for the quarter and year ending 31st March 2026. FY26 saw strong colocation additions supported by continued customer network expansion. Sustained business momentum and positive developments at our customers end underpinned our financial performance. In terms of financial performance for quarter four FY26 total revenues were at 81 billion, growing by 4.8% year on year. Core revenues from rentals stood at 53.1 billion up 5.4% year on year driven by healthy colocation additions.
Please note that quarter four of last year had one time reconciliation benefits. I had explained in quarter four FY25 earnings call that the benefits added about 2.1 percentage point to the sequential growth in core revenues. With regard to Quarter 4 FY26, our reported gross revenues were 0.6% lower quarter on quarter due to lower energy revenue which is an outcome of both our cost optimization and seasonality. Driven by reduction in the energy cost, core revenues increased by 0.6% quarter on quarter impact of one time settlement in quarter four and network optimization by our customers.
Weighed on the overall growth in revenue on profitability, reported EBITDA was at 44.6 billion growing by 1.6% year on year and declining 1% quarter on quarter. The EBITDA margin was lower by 1.8 percentage point year on year and 0.2 percentage point quarter on quarter at 55.1% for quarter four FY26. I would like to remind you that quarter four FY25 included writebacks of approximately 2.3 billion related to collection of overdue receivables from a major customer. Quarter four last year also included accounting impact of towers acquired from airtel amounting to rupees 1.7 billion towards operating expenses and depreciation.
Adjusted for the write back and accounting impact, EBITDA was up 4.5% year on year. The sequential decline in EBITDA was partially due to higher network costs which increased primarily due to higher maintenance activities on our aging and growing TAR portfolio. Our energy margins were at negative 3.6% in quarter 4 FY26 compared to minus 5.2% in the same period last year. We continue to undertake cost optimization initiatives particularly around energy management. This includes structural reduction in diesel dependence through increased adoption of renewable energy solutions, battery augmentation and continued focus on our operational efficiencies.
These efforts are complemented by technology led monitoring and disciplined execution enabling a more predictable and efficient energy cost profile. Our profit after tax grew by 0.8% year on year and 0.9% quarter on quarter to rupees 17.9 billion. The moderate year on year growth is a result of higher base due to one time reconciliation benefits in quarter four last year as I explained earlier. Now moving on to full year performance for FY26, our reported gross revenue stood at rupees 325 billion growing by 7.9% year on year while core revenues were up 9% year on year to rupees 209 billion.
Reported EBITDA was rupees 180 billion down 13.8% year on year and profit after tax stood at rupees 71.4 billion, a decrease of 28.1% year on year. Kindly note that the FY25 included a substantial writeback of rupees 51 billion relating to collection of overdue receivables from a major customer. So on a normalized basis excluding one offs, EBITDA and PAT grew by 11.4% and 13% respectively. Our return ratios remained largely stable with reported pre tax return on capital employed and post tax return on equity standing at 20.2% and 19.8% respectively.
On a trailing twelve month basis we had significant free cash flow generation of rupees 11.1 billion in quarter four and rupees 37.6 billion in full year. FY26 and subsequently the board has recommended final dividend of rupees 14 per share reflecting improved visibility on cash flows and our commitment to reward shareholders. To conclude, FY26 reflects strong financial performance underpinned by healthy co location additions and disciplined execution and our ability to capture major share of rollouts by our key customers.
Ongoing demand momentum and consistent collections along with our focus on cost optimization and operational efficiencies provide strong visibility into future cash generation. So with this I will now hand it back to the moderator to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you very much Sue Ladies and gentlemen, we will now begin the question and answer interactive session for all the participants who are connected to audio conference service from Chorus. Due to time constraints 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 press star and 1 on their Touchstone Enable telephone keypad.
On pressing star and 1 participants will get a chance to present their questions on first in line basis. To ask a question participants you may please test Star and one now. The first question is from the line of Rishabh from hsdc. Please go ahead.
Unidentified Participant
Hi, thanks for the opportunity and congrats to the management for dividend distribution and starting from there. So we have paid around 100% of this year’s free cash flow, but how should we think about the additional free cash flow we had received or generated last year which was an account of reversal of dues from BI If I’m not mistaken they were also supposed to be made available for distribution. And secondly I would like to understand more about the CapEx going forward. Understand the green capex companies making and higher maintenance required on the aging portfolio.
But if you can have some guidance over the next couple of years how should the capex spend as it directly impacts the free cash flow and dividends?
Prachur Sah
Sure. So maybe I’ll answer the first part then you can take up the capex. See the board evaluated the FCF situation and the debt levels that we want to maintain and accordingly to distribute the FCF of FY26 and as I mentioned the endeavor will remain to follow steady and progressive distribution going forward. So that’s the thinking behind the dividend. Maybe Vikas, you can touch base on the CapEx. Yeah,
Vikas Poddar
So thanks for the question Rishabh. I think on the capex just to give you the big picture and as we’ve also explained earlier, 70% of the CapEx that we spend is growth oriented which basically leads to growth in our revenue and bottom line and just about 25% is basically something that goes towards replacement maintenance and so on. So I think as long as there is growth and there is basically, you know, tower build, order etc. I think the CapEx will sort of, you know be steered towards that. As far as the future guidance is concerned I think we still have a very healthy order book.
So while we don’t give any sort of forward looking numbers but broadly speaking I think we are sort of looking at a very good order book and we continue to see you know, growth oriented capex going forward.
Unidentified Participant
Just a couple of follow up on the free cash to and debt that you had mentioned like these liabilities we are sitting on net cash. Right. So is there anything that the management is foreseeing on a major investment area so that we want to maintain our debt levels and you have mentioned the order book remains healthy. Does this order book includes expansion in Africa as well or is it just India?
Prachur Sah
No, I think what Vikaj is referring is primarily to the order book of India and as I mentioned in my commentary I think the Africa expansion is just starting. It’s a long term strategy so the the portion of Capex for Africa is not going to be that significant to start with. So I think it’s order book that he’s referring to is primarily on the, on the India side and as far as the you know, debt and FCF situation is concerned I think keeping capital allocation in mind and all the growth opportunities coming up that’s where the board decision came to distribute the FCF of FY26.
Unidentified Participant
Okay, I’ll go back to the queue. Thank you.
Prachur Sah
Thank you.
Operator
Thank you. The next question is from the line of Sachin Seligonkar from Bank of America. Please go ahead.
Sachin Salgaonkar
Thank you for the opportunity. I have two questions. First question because I just wanted to clarify on the dividend policy. Well Prachu did mention on steady and progressive distribution. Is there a dividend policy or is it more ad hoc where every year the board will consider based on the cash flows and plan and give dividend. And if there is a dividend policy then can you clarify what is a dividend policy?
Vikas Poddar
Yeah, sure Sachin. So the dividend policy is first of all available on our website. Broadly what it says is the company and the board will consider distribution of the free cash flow of the company at the year end subject to the working capital requirements of the company and subject to a few other conditions. So based on that even for this year the free cash flow of the company, the financial results etc. Was presented and the board decided to distribute the full cash generation of this year as dividend which is what is reflected in the 14 rupees,
Sachin Salgaonkar
No minimum day payout kind of an amount which is out there every year. The board will consider that.
Vikas Poddar
That’s right. That’s right.
Sachin Salgaonkar
Got it. Second question. One of your major customer contract has expired. And from what we understand that customer has not renewed the contract. Can you give some color and updates here and if the customer decides not to renew contract and what kind of impact could we see?
Prachur Sah
So Sachin, first of all I think there is. We have contracts for each tower, right. So I think there is no broad contract expiry. I think there are certain tenancies which fall under that bucket. It’s not the entire portfolio. Secondly, I think if you look from our portfolio point of view over the last three, four years we have built quite a bit of resiliency by deploying large scale towers and co locations. So that portfolio is actually the expired portfolio is actually very small portion of the entire portfolio.
So while we continue to work with the customer to see how we can continue to provide the stickiness by providing high levels of service. But over the last three, four years and continuously what we are doing, we are trying to mitigate any such risk that is there. Right. So we will keep the situation, we’ll keep monitoring the situation and keep growing the portfolio across the customers as well.
Sachin Salgaonkar
And you know when I look at your tenancy ratio for last 34 years it has come down and continues to come down. So directionally that’s a trajectory we should think about going ahead as well. Right?
Prachur Sah
I would not, I would not give you a look in that format because see last few years was determined by deploying tenancies towers for one major customer. See as the second customer comes on board and sharing and giving a co location on existing tower is beneficial for both customer and us in terms of what the cost efficiency brings. So as the second customer comes and get their network expansion going I would not say the trend will continue in that direction. However it is, it is depending on the pace on how the second customer comes on board.
Vikas Poddar
Sorry, I’ll just add Sachin, I think if you look at the trend for the last five or six quarters we have been very stable which basically means, you know there is basically more tenancy or more colocation addition than the tower additions. Right. So I think the stability is a good thing and going forward as the second customer comes on board we might actually see some improvement also.
Sachin Salgaonkar
And lastly one small follow up out there. You did mention on Apricart, you know you’re on talks with primary customer beyond the primary customer. Are you in talks with some incremental customers out there or as of now the focus is only on one customer out there?
Prachur Sah
No. So I think Sachin, we are, we are talking to other customers as well. But as I said, I’ve said in previous call as well is our long term strategy is to get started and establish ourselves with the anchor customer. And I think as we’ll be present in the market of course if we are offering better competitive prices, sorry cost, SLA and efficiency the second customer would also be attracted to come towards us. So I think the discussions are far more advanced with the anchor customer and the other customers are being engaged depending on where we are getting the setup done.
Sachin Salgaonkar
Thank you and all the best.
Prachur Sah
Thank
Sachin Salgaonkar
You.
Operator
Thank you. The next question is from the line of Vivekanand Subraman from Ambed Private Limited. Please go ahead.
Vivekanand S
Yeah, thank you for the opportunity. So if I look at the rental income growth adjusted for some of the one offs my inference is that the revenue growth is around 4.7% year on year. Could you help us understand the drivers of this in terms of let’s say escalation, revenue increase, contribution from escalation then new towers and tenancies and negative effect of discounts if any.
Vikas Poddar
I’ll take that Vivekanand, I think see I guess you’re referring to the growth full year growth of 9% that we have reported, am I right? Service revenue.
Vivekanand S
So I was referring to the 4Q FI rental income and I just took out some of the one offs that were there in the base period. And also the inorganic hour purchases that you had done stripped that revenue out as well from both periods to arrive at 4.7%.
Vikas Poddar
Well, I think I’ll just maybe explain the number that we have reported. I don’t know how the 4.7% is being calculated. Maybe we can take that offline. But for the quarter we have reported service revenue year on year growth of 5.3%. So as you can see that’s largely driven by the colocation growth. If you look at our co location numbers year on year you would see a growth of 5.6%. And then the other growth drivers are typically the annual escalations that we have on our sites as and when they complete the anniversary.
Also bear in mind, like I explained in my narrative, there was a one time settlement benefit in the the same quarter of last year that added 2.1 percentage point to our growth. So broadly, I mean if you adjust for that, then we are closer to 7% growth in the quarter. Year on year. Seven, seven and a half.
Vivekanand S
Right. But then the 7.5% growth is also because you acquired towers from Airtel at the end of the quarter. Right. Last year. But this was an inorganic element in that.
Vikas Poddar
Yeah, that’s organic
Vivekanand S
Growth will be close to 5% still, right? Or is there? Yeah, five, five and a
Vikas Poddar
Half. That’s right. That’s right. Okay,
Vivekanand S
So just to drill further on this, the five and a half percent growth, if I look at it against the backdrop of colocation growth of 5.6%, annual escalation of 2 and a half percent. Why. Why is the growth so muted compared to 10% growth prior period?
Vikas Poddar
So like I explained, there was also just like we had a reconciliation one time settlement benefit in the same quarter of last year. This year we had some impact. So as a result the growth was also slightly muted because of that and it is not fully reflecting the growth in the footprint.
Vivekanand S
Fair enough. Understood. And your prognosis in terms of the order book visibility and organic growth adjusted for some of these factors, how should we think about it? Let’s say for FY27, if you have any color,
Vikas Poddar
I think I would hesitate in giving numbers because as you know we really don’t give any forward looking numbers. But broadly I think in terms of the rollout momentum and all, of course the while I mentioned that the order book is Healthy. But at the same time we need to also take into consideration the fact that there is a, you know, a supply chain disruption that we are facing because we are in the middle of a geopolitical situation. I think Prachu can elaborate that maybe later on. But you know, we need to be a bit cautious when we, when we talk about forward looking views.
Yeah.
Prachur Sah
So I think as Vikas was mentioning, there is a strong order book looking ahead as well for the next few quarters. However, I think given the situation and there is a little bit of a tightness in the market in terms of tower supplies because that is dependent on LPG availability. Having said that, we have managed to mitigate some of those things by planning by supply chain, working with the partners, etc. So hence looking forward, there are some factors which are not entirely predictable, but at the basis of it, the order books look strong.
Whatever supply chain disruptions happen, we’ll be putting efforts to mitigate them and continue to deploy towers to make the order book.
Vivekanand S
My last question is on the dividend at the time of the board resolution that you had sought to acquire powers from it and you had mentioned that the funding of those towers will happen using that and also the commentary in prior periods had suggested that there will be some element of distribution of fiscal 25 cash flow. Also cash accruals also which the management, perhaps at a certain point of time, maybe last year, the management had taken a view that it was in the best interest of conservatism to hold on to that cash.
Why has that cash not been released and only the cash flow generated for FY26 been decided to.
Prachur Sah
So honestly speaking, I don’t think the board compartmentalized the cash flows in that category. I think what the board did is they violated the full fcf, looked at the debt levels that we want to maintain and decided to distribute the FCFY 26. And as I said earlier, the board is committed to distributes the CF to the shareholders and try to maintain the steady and progressive distance. Anything else you want to add?
Vikas Poddar
I think it’s a very holistic view one needs to take. I mean, see, we are in a very dynamic situation, right? And basically given the current situation, the current debt levels, etc. I think the board has fully considered all aspects and finally decided to distribute, you know, dividends to the extent of about 37, 38 billion, which, I mean, whichever way you look at it, I mean, like what you said, I mean you just can’t compartmentalize all these things within, let’s say how Much is pertaining to that particular transaction and how much is from this year’s cash and so on.
But broadly how we are looking at it is the cash flow for full year has been fully distributed.
Unidentified Participant
Okay, thank
Vikas Poddar
You.
Operator
Thank you. The next question is from the line of Sanjay Jain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, thanks. Thanks for the opportunity. I have a few of them. First on the maintenance part which you spoke, which has led to higher cost with us in the opening remark, just wanted to understand was this a one time exercise or you think because the towers have been aging now this will be an annual phenomena for us and hence the cost base has got leased?
Prachur Sah
Sanjay, I don’t think that is the case. What if you look at typically historically as Well, I mean Q4 is typically marked by two things. One is, you know, this is Q3 and Q4 are the quarters where we have a clear weather. So lot of the operational and tower maintenance activities are scheduled in this part of the quarter because the post it. And secondly in Q4 as well, what we are doing is we are preparing for the coming season. So I think typically the network maintenance activities are lopsided towards Q3 and Q4.
However, if you remember in Q1 call itself, what we have done is we have taken a conscious effort to spend, you know, spend certain part of cost on improving the tower, doing more tower maintenance strengthening activities. As the portfolio is at a certain age. However, it is not a structural cost that is going to permanently increase. There is some parts which are routine activity that is going to be continuously done with the rigor of making sure it is done. So I don’t think, I would say the cost base is fundamentally reset.
I think our cost per tower still remains in line. Or actually if you look at the holistic picture from the last three, four years, our cost per tower has actually gone down. But there are certain elements of cost on absolute cost that show up. So just look at the tower count and look at the cost with that mirror.
Vikas Poddar
Sanjish, I just want to add one thing for perspective. I mean while you’re looking at a three month. But what is also important is to look at the full year, right? So sometimes you have basically activities skewed towards a particular quarter. But from a full year perspective what you will see is the tower cost or maintenance cost increase is not even reflecting the volume increase because we are offsetting a lot of these increases either due to volume or Aging Portfolio etc. Through the various efficiency initiatives that we are driving
Sanjesh Jain
Because it’s more like a seasonality it sounds like a seasonality rather than a maintenance In
Prachur Sah
A way you could say seasonality because Sanjay operations is never binary in that sense. I think seasonality, portfolio maintenance, I think all this come together and that’s what Vikas is saying. We have to look at the full year. You have to look at the volume of towers being added and look at the cost from that perspective.
Sanjesh Jain
The second question on the single tenancy tiles the assumption was that as the Vodafone scales up the single tenancy task will come down. We don’t have data for this quarter but if I analyze the data for Q3 it appears that we have added more single tenancy tower not just accommodating Bharti but also accommodating Vodafone. Will this trend continue and what is driving additional tenancy addition for Vodafone? I thought we have covered well Pan India during the Bharti rollout.
Prachur Sah
I’m not very clear on the question but let me try to answer. At the end of the day both in Q3 and Q4 if I’m not wrong, correct me if I’m wrong. Our colocation additions have been higher than the tower editions. So fundamentally there are single tenancy tower that are getting converted to multi turning tower. So that is the first point. Secondly for any customer to expand they have their own network expansion strategy. So while bulk may come through second as a co location addition but there will be some single tenant towers as well being added.
So any customer when expands look at both the first priorities to come as a second tenant and then. But the network requirements of their network design will be based on the addition of a tower whether it’s a single tenant or a multi tenant. So I wouldn’t, I would leave it at that.
Sanjesh Jain
No, no. Just let me probably clarify on that question. Last last quarter we added 3800 new towers. Bharti site count went up by 1150, 1200. That means we have added around 2000 more T in previous quarter than what Bharti has added which I would attribute it to Vodafone which was appear to quite a large number from a fresh tower edition for Vodafone. The base assumption was that considering both have an 1800 frequency RF planning they would a lot will overlap each other’s network. But it appears that we will require to add more tower when Vodafone rollout starts.
Prachur Sah
I think there is a correction. I think the assumption that every single tower that the difference that you mentioned between 1100 and 3000 is coming from the other customer I think there is some, there’s some gap to that because there are certain towers we also add for either customer where they are. While they may not see a net addition in their portfolio, but it is typically at the end of the tenure they move certain towers from other incumbents to Indus or the otherwise. Right. So I think there is a portfolio that we also add in our setup which is moving the tower of the tenancy from someone else to Indus.
So I think it’s not a direct subtraction. That total index minus one customer is equal to the other customer. So I think there’s a big element of movement of tower from one tower company to the other which is not a net addition for a customer.
Sanjesh Jain
No, that’s fair enough. Just one last question on Africa. When should we expect operations to start? Probably six months down the line will be a fair assumption.
Prachur Sah
As I mentioned earlier, I think we are at a very close stage of starting our first tower deployment in Zambia. I think six months is more than a fair estimate. I think it’s probably earlier than that. But we’ve got the license and we are on the ground now. So yes, we are looking to put our first tower very soon.
Sanjesh Jain
Got it, Got it. And we have set up NOC and all right. In Africa or we will do it through India.
Prachur Sah
I think we will, we will find a solution. I think we will have to depend whether we manage from here or whether we do it locally. I think we’ll have to see. But I think as of now the focus is to deploy the tabs.
Sanjesh Jain
Got it. Got it. Thanks Vikas for all those answers and best of luck for the coming quarters.
Prachur Sah
Thank you. Thank you, Sangesh.
Operator
Thank you. A reminder to all the participants that you may please press star and one to ask questions at this time. We’ll take the next question from the line of Arun Prasad from Evandes Park. Please go ahead.
Sachin Salgaonkar
Thank you. Good afternoon everyone. Thanks for opportunity. Because my question once again going to the sequential drop in the EBITDA that we have said. Okay, if I, if I put it on a perturbate basis, how we are looking at is that there is a drop in a EBITDA per favor on a sequential basis roughly around per month. But not everything is coming from the same maintenance because again on a per cover basis, on a reported basis it is just contributing 20 percentage of the increases decreases coming from the maintenance.
It seems large part of the EBITDA per cover decrease on a sequential basis is coming from the revenue per day or sharing revenue per table. So can you help us Reconcile this difference.
Vikas Poddar
So Arun, I think there are basically, you know, more than one, there’s more than one reason for this. So of course there is, like I explained, there is some one off sitting in the revenue which is because of the settlements that have happened in quarter four. So that’s impacting the top line as well as the ebitda. Apart from that, if you see the other lines, I think even the network maintenance as we were Explaining is growing 5.6% quarter on quarter which is largely driven by the activities, maintenance activities, etc.
That we undertook in quarter four. So that has impacted. Apart from that, if you look at the other expenses, we had some one off there also and that is also basically showing a big quarter on quarter increase because of the one off benefits sitting in the previous quarter. So there are basically two, three reasons why EBITDA sequential performance in quarter four has been slightly worse off than the previous quarter. But broadly, I mean we are still talking about a 55% EBITDA margin which is quite healthy.
And from a full year perspective, I think we are pretty much in line with our expectation of 55% plus sort of an EBITDA level.
Sachin Salgaonkar
Okay, the one offs that you are saying that is there in the Q3 or on a revenue side you are saying that the negative one off is there on the revenue only on the Q4. But on the cost side you are saying that one of these there in the Q3 cost.
Vikas Poddar
Right. So there is a positive one off in Q3 and there is a negative one off in Q4. So somewhere that is the impact of that is getting more pronounced in the ebitda.
Sachin Salgaonkar
Okay, okay, okay, no problem. I’ll take this offline separately. My second question, again, I don’t want to look at it from the Q4 basis, but if I look at from the second half basis, I see two trends. One is that our exits in the second half is twice that of our usual annual run rate. I’m talking about second of 26. Second, our energy margins in second half is again better than either the first or the second half in the previous year. This is something that is, you know, how should we look at this?
Prachur Sah
I think I’ll answer both of them one by one operationally and then you can comment on the number. See, as far as the exits are concerned or the churn is concerned, I think it is. I mean most of these churns are BAU business, usually kind of a churn. And I think typically, if you look at, they typically get replaced by a relocation tenancy and it is typically done because of safety reasons or landlord renewal. So the number is not. That’s concerning for us because typically we get offset by a relocation site that we make.
Right. So from a tenancy point of view there is no loss. Right. And so this is an operational churn that we, in a large portfolio like this, we expect this to happen on the energy margin. You know, we discussed this earlier as well. H2 seasonally is much better than H1. So by default the operating cost or the, the impacts or the variations that we see are lower in the second half than in first half. So if you look historically as well, H1 has A. Has A. So it’s primarily. H2 is primarily driven by a seasonal improvement and H1 is primarily impacted by a seasonal impact.
So I think, unless
Vikas Poddar
I don’t think there’s anything major, sort of something different that I have to say I think what is very important to bear in mind is H1 has clearly more weather related impacts and weather disruptions in our operation. H2 is generally better from that perspective. And hence most of the maintenance and safety activities that we undertake are more skewed towards H2, which basically means as and when we build new towers and try to relocate from unsafe towers and so on. You see more exits in H2 than H1.
So there’s always a seasonality angle in our business business. But energy margins in H2 is even lower than the last year’s H2. So that is likely comparison. Right? How do we explain that the energy margin, I would suggest one is energy margin is a function of revenue and cost and how we settle the differences. Right. The seasonality will clearly show you the cost trend and you will see the cost trend is better in H2 versus H1. The margin trend is a function of when you are settling things. And if you are settling things more in H2 then to that extent I think it is a function of how things are getting settled or the timing of settlement.
So I would suggest don’t read too much into the margin. When it comes to margin timing wise things could vary. Look at full year. When it comes to cost. Look at seasonality.
Prachur Sah
Yeah, I think look at the margin on a year, on year basis. If I’m not wrong, I think the margin this year is same or even slightly better than last year. So I think at a full year from an energy perspective,
Sachin Salgaonkar
While we are in this energy margin topic, just hypothetically say if the diesel price or grid electricity price has to go up, our margins on absolute margins as a will remain, say on as a percentage will it remain same and hence our absolute negative margin and energy will go up or the other way around. The negative energy margin remains same but as a percentage it will reduce.
Prachur Sah
See at the end of the day the change in. When, when it happens as a price it impacts revenue and cost. Right. So it impacts both revenue and cost on almost a similar basis. So from a reconciliation perspective I think the percentage may change because there is a. There will be some sort of an absolute difference but will not be a material change from a percentage margin point of view. Of course the cost and revenue will change accordingly
Sachin Salgaonkar
So that. So my understanding is the percentage remains same then increasing price.
Prachur Sah
Yeah, I would not say exactly the same. I think there will be an impact on the margin itself but the larger impact will be seen on the absolute revenue and absolute cost.
Sachin Salgaonkar
Okay, okay, okay. One final accounting clarification. I think earlier we were talking about the annual escalation rate reflecting as part of the revenue growth. But my understanding is the revenue equalization standards would ensure that escalation will not be. Should not be contributing to the. At least on a annual revenue growth rate on a perfect.
Vikas Poddar
There are a lot of nuances in this in terms of the lease accounting. I would suggest we take this offline. We can take you through the workings offline.
Sachin Salgaonkar
Understood. Thank you very much.
Operator
Thank you. The next question is from the line of Saurabh Handa from Citigroup. Please go ahead.
Saurabh Handa
Yeah, thank you for the opportunity. These are actually both follow ups to previous questions. Firstly, just back on the question of your tower editions which have averaged close to around 4,000 odd over the last three quarters and one of your large customers has been adding one and a half 2000. So you said the difference could be partly because of new tower additions for other customers as well as some potential churn that happens. Would one of these two factors have a higher bearing than the other?
Just trying to get a sense of which one could be a bigger contributor.
Prachur Sah
No, I would not put a number because it varies by quarter at the end of day it’s a net tenancy addition to Indus. So it does impact the revenue positively. That is the main takeaway. But the split is not a fixed number. I would say.
Saurabh Handa
Okay, where I was coming from is because obviously there’s a lot of this chapter about renewables for one of your the third customer and if that could be to churn for you. So the point I was trying to add is is there a potential offsetting factor? Do these cancel each other? I mean, I know you’ve Said that there are a lot of considerations if a tenant chooses to move out of to move from one tower code to the other. But I was just trying to get some more granularity on that.
Prachur Sah
See I, if I was you I would primarily look at the net additions of the tower portfolio tenancies. I think that’s where the the churn gets offset by relocation. It’s not a net tenancy addition but it’s not a net loss. However, if we get a tower from somebody else where the current operators operating in some else and moves to Indus, that’s a net addition to Indus. So I would look at the overall net addition of towers and tenancies to Indus to make your own trends.
Saurabh Handa
And this is where you’re saying that so far the order book pipeline is quite alright for the coming few quarters. Okay, thank you. And just my second question was on the energy margins. Now with the 50% increase in bulk diesel prices, how does that impact your energy costs? So is there a need lag impact where maybe it hits you first and then you pass it on? If you can just provide some sort of color on this.
Prachur Sah
No, there is no lag I think we bill actually on actual. So as I mentioned I was explaining earlier, the same question was earlier that once the retail pricing if the retail pricing has an impact it will impact both the revenue and cost on an equal basis. The net margin may have a slight impact impact towards negative side but it’s the major impact comes on the revenue and cost on an equal basis. Right. There is no lag we bill as it actually happens.
Saurabh Handa
But this actually did happen in March because bulk diesel prices were industrial.
Prachur Sah
No, that was industrial diesel price. It was not the retail which we. We buy retail.
Saurabh Handa
So I was under the impression that our company is used by. That’s not the case.
Prachur Sah
Okay,
Saurabh Handa
Great. Thank you for the clarification. Thank you.
Prachur Sah
Thank you.
Operator
Thank you ladies and gentlemen. We’ll take the last question for today which is from the line of Vedant Sada from Nirmal Bank Securities Titan. Please go ahead.
Vedant Sarda
Thank you for the opportunity. Am I audible?
Vivekanand S
Yeah.
Operator
Yes.
Vedant Sarda
Just to clarify on our renewals since your contracts are structured tower wise or site wise as you said with respect to reliance you for the tower wise contracts that have expired. Have there been any non renewals or site exits from jio?
Prachur Sah
No, I think there are. I mean for all the customers we always have a portfolio which are non renewed and we work with them when they get renewed. Yes. Even for there are certain tenancies that have expired which are which are still operating and some some churn have happened which which we report. So I think it’s not a one or the other way. It’s not that all the non renewed have expired or have been charged. That’s not the case. In fact very minor percentages have been churned.
Vedant Sarda
Okay. And so the contacts which we have renewals happened so that are at the same commercial terms as earlier contracts. So no incremental discount or price concession we have given to them.
Prachur Sah
Yeah. If the renewal doesn’t happen I think we continue operating the same way.
Vedant Sarda
That’s helpful. Thank you so much.
Prachur Sah
Thank you.
Operator
Thank you sir. At this moment I would like to hand over the call proceedings to Mr. Pratrin sir for final remarks. Thank you and over to you.
Prachur Sah
To conclude, FY26 reflects consistent execution across our strategic priorities with our core business continuing to demonstrate resilience and steady growth supported by healthy co location additions and sustained customer network expansion. Our plan to expand into Africa is a testament to our agile approach to growth which will also be enabled by investments in digital and AI led capabilities. Given our proven execution track record, focus on efficiency and long term capital discipline, we remain confident in our ability to deliver sustainable growth and create long term value for all our stakeholders.
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 Correspond and have a pleasant day. Thank you.