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Indus Towers will continue to get a major chunk of its total revenues from setting up telecom towers for service providers even as the new electric vehicle (EV) charging infrastructure business would give double-digit returns, the top management of the country's second-largest telecom tower provider said in its December quarter (Q3FY25) earnings call on Friday.
“Our primary driver of the business remains the tower business and EV is in early stage. We will maintain that difference so that the tower business does not suffer, so a separate business unit, separate team that will drive the business,” said managing director and chief executive Prachur Sah.
“We are aspiring for mid to high double-digit returns. However, the [EV] business scale is currently too small to discuss returns in detail. Our priority is to develop this business, evaluate the competitive landscape, and then see where it goes. But in terms of aspirations, we expect double-digit returns,” said chief financial officer Vikas Poddar.
Sah added that the selection of contracts or deals with customers would be very prudent such that they’re close to the telecom tower business model the company currently follows. On Thursday, the company said it was venturing into the electric vehicle charging market as an outcome of looking into ‘adjacent business opportunities’ to support its long-term growth.
Pilots in Gurugram and Bengaluru have already been launched.
“We are planning to look at capitalizing on our core strength of managing space, power and OEM (original equipment manufacturer). And as we expand our discussions with the potential customers on a case to case basis, we will make the decisions accordingly,” Sah added.
He noted that doubtful debt owed by Vodafone Idea had reduced to ₹500 crore but the overall outstanding dues continued to be higher even as it wrote back ₹3,000 crore that it had provisioned for potential losses after some payments were made by the debt-laden company during the quarter ended December.
He said that Vodafone Idea's expansion of its coverage will lead to monetization of Indus' current towers that have single tenancies. Vodafone Idea has laid out a capex plan of ₹50,000-55,000 crore over three years towards strengthening its 4G coverage and launching 5G services.
Indus Towers' officials said that dues being paid by Vodafone Idea, favourable outcomes for tax issues that were pending in courts, and Vodafone Group Plc's sale of 3% shareholding, had led to improved cash flows. They added that Indus would evaluate payment of a dividend to shareholders at the end of the ongoing financial year. The company has not announced a dividend in the past two years.
On Thursday, Indus Towers reported a net profit of ₹4,003 crore for the December quarter, jumping from ₹1,541 crore a year ago. Third-quarter Ebitda rose 93.2% to ₹6,997 crore versus ₹3,622 crore a year earlier. Revenues rose 4.8% to ₹7,547 crore. It generated free cash flow of ₹2,660 crore during the quarter.
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