{"id":160731,"date":"2024-05-01T11:41:06","date_gmt":"2024-05-01T15:41:06","guid":{"rendered":"https:\/\/44.250.171.167\/?p=160731"},"modified":"2024-05-01T11:41:08","modified_gmt":"2024-05-01T15:41:08","slug":"indus-towers-limited-q4-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/indus-towers-limited-q4-fy24-earnings-conference-call-insights\/","title":{"rendered":"Indus Towers Limited Q4 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Indus Towers Limited (INDUSTOWER) Q4 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>5G Rollout<\/strong>\n<ul>\n<li>Accelerated 5G rollout by major telecom operators continued in Q4.<\/li>\n<li>Over 435,000 5G base transceiver stations (BTS) deployed so far.<\/li>\n<li>Large 5G rollouts added to loading revenues and drove strong growth.<\/li>\n<li>Wider 5G adoption expected to spur demand for new sites for network decongestion.<\/li>\n<li>Company confident in leveraging 5G opportunity given leadership in passive infrastructure space.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Subscriber\/Data Usage Growth<\/strong>\n<ul>\n<li>5G subscribers expected to grow from 131 million in 2023 to 575 million by 2026.<\/li>\n<li>17% of active 4G devices now capable of operating on 5G networks.<\/li>\n<li>5G&#8217;s contribution to total data traffic increased from 1.7% in 2022 to 15% in 2023.<\/li>\n<li>Average data consumption per user per month for top 3 operators grew 14% YoY to 24GB.<\/li>\n<li>Total data consumption grew 24% YoY in Q4 2023.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Record Tower Additions<\/strong>\n<ul>\n<li>Company achieved highest ever quarterly and yearly tower additions.<\/li>\n<li>Added 7,961 macro towers and 7,909 co-locations in Q4.<\/li>\n<li>Full year macro tower and co-location additions were 26,862 and 25,757 respectively.<\/li>\n<li>Industry-leading tenancy ratio at 1.68.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic Priorities<\/strong>\n<ul>\n<li>Focused on improving time-to-market, partner ecosystem, resource planning, product offerings.<\/li>\n<li>Initiatives to reduce diesel consumption &#8211; energy storage, renewables, site conversion.<\/li>\n<li>Added over 8,000 solar-powered sites in Q4 to expand renewable energy portfolio.<\/li>\n<li>Achieved 100% collections from major customers, made some overdue collections.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Q4 reported gross revenues grew 6.5% YoY to INR71.9 billion.<\/li>\n<li>Core rental revenues grew 7.7% YoY to INR45.8 billion, aided by tower additions and 5G loading.<\/li>\n<li>Q4 reported EBITDA up 19% YoY and 13.3% QoQ to INR41 billion.<\/li>\n<li>EBITDA margin improved 6% YoY and 6.7% QoQ to 57%.<\/li>\n<li>FY24 reported gross revenues up 0.8% YoY to INR286 billion.<\/li>\n<li>FY24 reported EBITDA up 50.4% to INR146.3 billion, PAT up 3x to INR60.4 billion.<\/li>\n<li>Collected over 100% of average monthly billing, resulting in write-back of provisions.<\/li>\n<li>Trade receivables increased by INR4.3 billion due to timing difference in collections vs provision write-back.<\/li>\n<li>Cumulatively provided INR5,500 crore for doubtful debt, collected INR370 crore in Q4.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Market Share Gains<\/strong>\n<ul>\n<li>Increased market share across all customers for new tower rollouts.<\/li>\n<li>New tower rollouts primarily driven by one major customer.<\/li>\n<li>5G rollouts on existing towers counted as loading, not new rollouts.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Future Business Outlook<\/strong>\n<ul>\n<li>Expect momentum of strong tower additions to continue for some more quarters.<\/li>\n<li>High capex phase likely for some time due to accelerated customer rollouts.<\/li>\n<li>New business from Vodafone Idea post fundraise likely incremental tenancies, not new towers initially.<\/li>\n<li>Clarity on incremental business, dues clearance expected soon after customer discussions.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Rental Outlook<\/strong>\n<ul>\n<li>Average rental per tenant (ARPT) expected to remain fairly stable.<\/li>\n<li>Existing towers get annual rental escalations as per contract, around 2.5%.<\/li>\n<li>New rollouts leaning towards lower rental but agile\/nimble tower designs, creating some ARPT mix impact.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capex Visibility<\/strong>\n<ul>\n<li>Strong visibility for next few quarters based on customer forecast\/order book.<\/li>\n<li>FY25 expected to be high rollout year, aiming for additions higher than FY24 levels.<\/li>\n<li>If additions moderate to pre-FY24 run-rates, capex could see sharp 50-60% decline in H2 FY25 or FY26.<\/li>\n<\/ul>\n<\/li>\n<li><strong>ARPT Outlook<\/strong>\n<ul>\n<li>Average rental per tenant (ARPT) expected to remain broadly stable.<\/li>\n<li>Upward pressure from 5G loading revenues offset by downward mix impact from new lower-rental tower additions.<\/li>\n<li>Around 8-12% of tenancies come up for renewal every year at discounted rates, creating downward pressure.<\/li>\n<li>Renewal discounts part of framework agreed with customers in FY22.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Lean Tower Strategy<\/strong>\n<ul>\n<li>Lean tower rollouts will continue alongside macro tower rollouts to cater to different customer needs.<\/li>\n<li>Added close to 4,500 lean towers in FY24, expect higher share going forward.<\/li>\n<li>Lean towers suitable for dense areas requiring capacity enhancement, while macro towers better for wider coverage.<\/li>\n<\/ul>\n<\/li>\n<li><strong>New Business Opportunities<\/strong>\n<ul>\n<li>Continue to evaluate potential new business opportunities beyond towers.<\/li>\n<li>However, current focus remains on capturing strong tower market share growth.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Indus Towers Limited (INDUSTOWER) Q4 FY24 Earnings Concall 5G Rollout Accelerated 5G rollout by major telecom operators continued in Q4. Over 435,000 5G base transceiver stations (BTS) deployed so far. Large 5G rollouts added to loading revenues and drove strong growth. Wider 5G adoption expected to spur demand for new sites for [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,12],"tags":[10169,8234],"class_list":["post-160731","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-other-industries","tag-earnings","tag-telecom-equipment"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":135656,"url":"https:\/\/alphastreet.com\/india\/indus-towers-limited-q2-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160731,"position":0},"title":"Indus Towers Limited Q2 FY23 Earnings Conference Call Insights","author":"Praveen","date":"November 4, 2022","format":false,"excerpt":"https:\/\/youtu.be\/cnyA4J83TVg Key highlights from Indus Towers Limited (INDUSTOWER) Q2 FY23 Earnings Concall Q&A Highlights: [00:17:55] Kunal Vora of BNP Paribas enquired how the company is looking at the revenues coming in from the 5G rollout. 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