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As on 25-Jan-2023  10:34

Indus Towers slides after reporting dismal Q3 earnings

Revenue from operations stood at Rs 6,765 crore in the quarter ended 31 December 2022, down 2.34% from Rs 6,927.4 crore recorded in Q3 FY22.

The company reported a loss before exceptional item of Rs 459.3 crore from profit before exceptional item of Rs 2,088.9 crore posted in the same quarter a year ago. Exceptional item stood at Rs 492.8 crore in Q3 FY23.

During the quarter, the Group has taken impairment of the revenue equalization asset up to 30 September 2022 for this customer and shown the impact as an exceptional item in the statement of profit and loss. Further, the revenue amounting to Rs 66.3 crore for the quarter ended 31 December 2022 on account of straight lining of lease rentals is not recognized in the revenue from operations due to uncertainty of collection in future.

Consolidated EBITDA was at Rs 1,186 crore, down 68% year on year and representing an operating margin of 17.5%

The total tower base grew 2.51% to 1,89,392 as on 31 December 2022 as compared to 1,84,748 as on 31 December 2021. The closing sharing factor was at 1.79 times during the quarter as compared to 1.81 times during the corresponding quarter last year.

The company reported negative operating free cash flow of Rs 621 crore. The return on equity (pre-tax) dropped to 16.5% as against 39.3% on YoY basis [return on equity (post tax) declined to 12.3% as against 29.8% YoY basis]. The return on capital employed slipped to 12.5% as against 24.5% on YoY basis. The loss in the books was a result of adoption of stringent accounting practices by the company due to continued shortfall in collections from one of the major customers, said the company.

Prachur Sah, managing director and CEO, Indus Towers, said, “Our strong business fundamentals have enabled us to deliver a steady operational performance during the quarter. Our financial performance remains impacted as we have adopted stringent accounting practices amid persistent shortfall in collections. The rapid rollout of 5G services across the country marks an exciting phase for the telecom sector. Indus being the leading tower infrastructure company, stands to benefit from this opportunity and continues to participate in this journey.”

Indus Towers is India's leading provider of passive telecom infrastructure and it deploys, owns and manages telecom towers and communication structures, for various mobile operators.

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