Indus Towers Q1 profit up 43% on robust biz, announces ₹2,640 cr share buyback

Bharti Airtel's telecom infrastructure arm Indus Towers Ltd reported a 43% jump in net profit at ₹1,926 crore for the April-June quarter, driven by robust tower additions and collection of past dues. The consolidated revenue for the quarter was ₹7,383 crore, up 4.3% Y-o-Y. Indus Tower's consolidated EBITDA was at ₹4,545 crore, up 29.4% Y-o-Y and representing an EBITDA margin of 61.6%.

The return on equity (pre-tax) improved to 34.7% against 18.7% on a Y-o-Y basis, while post-tax, it improved to 25.7% against 13.8% Y-o-Y. The return on capital employed improved to 20.9% against 13.8% on a Y-o-Y basis.

"Q1 FY25 had a write-back of ₹760 crores in provision for doubtful receivables, aided by collections against past overdue," says Indus.

Prachur Sah, managing director and CEO, Indus Towers, says the company's business growth with collection of past dues underpinned its strong financial performance in Q1 FY25. "We expect network expansion and 5G deployments by our customers to continue to act as growth levers. We are confident of building on these opportunities to create value for our shareholders."

Indus Towers deploys, owns and manages telecom towers and communication structures, for mobile operators. It has a portfolio of 225,910 telecom towers present across all 22 telecom circles.

Share buyback

Indus Towers, at its meeting on Tuesday, considered and approved the buyback of up to 5,67,74,193 (5.67 crore) equity shares, representing 2.107% of the total shares at ₹465 apiece, a premium of just 4% compared to yesterday's closing price.

The share buyback amounts to ₹2,640 crore and does not include transaction costs, applicable taxes and other incidental and related expenses.

"The buyback size represents 9.9971% and 9.9668% of the aggregate of the company’s fully paid-up equity share capital and free reserves (including securities premium) based on audited interim condensed (standalone and consolidated) financial statements of the company as at and for the three month period ended June 30, 2024, which is less than 10% of the aggregate of the total paid-up capital and free reserves," says Indus Towers.

The board has fixed Friday, August 09, 2024, as the record date for determining the entitlement of shareholders who would be eligible to participate in it. "We have been informed by Bharti Airtel, one of the promoters, that it does not intend to tender its shares in the Buyback," says the statement.

Pre-buyback shareholding of the company comprises promoter and promoter group, which owns 52.01% stake in the company, public shareholding including Indian financial institutions (4.58%), mutual funds (12.88%), foreign institutional investors (FIIs) (24.20), NRIs (0.21%) and public corporates and others (10.68%).

Indus Tower shares are trading 2.44% down at ₹442.35 on the BSE, with its m-cap at ₹1.19 lakh crore.