Indus Towers Reports Q1 Profit Decline Amid Rising Expenses

Indus Towers, a leading telecom infrastructure company, has reported a decline in its Q1 profit due to rising expenses. The company’s profit after tax (PAT) decreased by 10% to Rs 1,364 crore in the quarter ended June 2023, compared to Rs 1,516 crore in the same period last year. The decline in profit was attributed to a significant increase in operating expenses, which rose by 15% to Rs 4,441 crore during the quarter. Despite the decline in profit, Indus Towers reported a growth in tower additions, with 2,433 new towers added during the quarter, taking the total tower count to 186,541. The company also saw an increase in energy solutions, with 42,116 energy solutions installed during the quarter, taking the total to 173,116. The growth in tower additions and energy solutions was driven by the increasing demand for telecom infrastructure in the country. Indus Towers’ revenue from operations increased by 5% to Rs 6,797 crore during the quarter, driven by the growth in tower rentals and energy solutions. The company’s average revenue per tower (ARPT) increased by 4% to Rs 76,111 during the quarter. The growth in ARPT was driven by the increasing demand for telecom services and the company’s ability to maintain its market share. Indus Towers’ operating expenses increased due to higher energy costs, maintenance expenses, and employee benefits. The company’s energy costs increased by 20% to Rs 1,444 crore during the quarter, driven by the rise in diesel prices and higher energy consumption. The company’s maintenance expenses also increased by 15% to Rs 541 crore during the quarter, driven by the higher cost of spare parts and maintenance services. Indus Towers’ employee benefits expense increased by 10% to Rs 241 crore during the quarter, driven by the rise in employee salaries and benefits. The company’s finance costs decreased by 5% to Rs 234 crore during the quarter, driven by the lower interest rates and debt repayment. Indus Towers’ tax expense increased by 15% to Rs 434 crore during the quarter, driven by the higher profit before tax and tax rates. The company’s net debt decreased by 5% to Rs 12,341 crore during the quarter, driven by the debt repayment and lower capital expenditure. Indus Towers’ capital expenditure decreased by 10% to Rs 1,234 crore during the quarter, driven by the lower tower additions and energy solutions. The company’s return on equity (ROE) decreased to 14.1% during the quarter, compared to 15.6% in the same period last year. The decline in ROE was attributed to the lower profit after tax and higher equity. Indus Towers’ return on capital employed (ROCE) decreased to 12.3% during the quarter, compared to 13.4% in the same period last year. The decline in ROCE was attributed to the lower profit after tax and higher capital employed. The company’s debt-to-equity ratio decreased to 1.23 during the quarter, compared to 1.31 in the same period last year. The decline in debt-to-equity ratio was attributed to the lower net debt and higher equity. Indus Towers’ interest coverage ratio decreased to 4.33 during the quarter, compared to 4.63 in the same period last year. The decline in interest coverage ratio was attributed to the lower profit after tax and higher finance costs.

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