Expect monthly payment from Vodafone Idea to continue: Indus Towers
Indus Towers, the country’s largest mobile tower company, on Thursday said the company expects one of its largest customers – Vodafone Idea – to continue clearing its monthly bills. Without naming Vodafone Idea, the towers company said it is engaging with the telecom operator to chalk out a ‘time-bound’ plan to clear past dues as well.
“While the customer (Vodafone Idea) had some challenges during the quarter, we received the monthly payment in October. Our expectation is that the monthly payment will continue and we will continue to charge as per the MSA (master services agreement) rates,” said Prachur Sah, MD and CEO, Indus Towers, at the July-September earnings call.
Comments from Sah assumes significance as Vodafone Idea owes Indus Towers about Rs 5,653 crore till September end, for which the towers company has made a provision for doubtful debts. Further, at a time when Indus has elevated its capex to support tower and tenancy additions, it is crucial for the company to recover past dues from Vodafone Idea.
In the September quarter, Indus Towers’ trade receivables rose 16.6% sequentially to Rs 6,186 crore. The company created an overall net provision for doubtful debt of Rs 1,335 crore during the quarter. Analysts said there was a minor provision of Rs 130 crore that Indus Towers created related to Vodafone Idea during the quarter.
“We have not written off any dues of the customer (Vodafone Idea). We do expect 100% or near 100% payment from the customer to continue,” said Vikas Poddar, CFO, Indus Towers.
Poddar added: “There was some financial commitment that the customer had in the previous quarter, but that hump is pretty much over.”
Even as Indus Towers said it is keeping a close eye on Vodafone Idea’s fundraising plan, any clearance of past dues by the telecom operator would come only when they raise funds.
Owing to higher capex, Indus Towers witnessed a negative flow of Rs 1,027 crore in the September quarter.
According to Sah, on the back of a healthy order book with Bharti Airtel expanding aggressively in rural areas as well as 5G rollouts, the capex will continue to be elevated.
Analysts said Indus Towers incurred a capex of Rs 2,300 crore in the September quarter, up from Rs 2,200 crore in the preceding quarter.
During the quarter, Indus Towers added 5,928 towers, taking total macro towers to 204,212. The company’s co-locations rose by 5,583 to 353,462.
“The quarter marked Indus Towers reaching a milestone of 200,000 macro towers, reaffirming its leadership position,” Sah said.
Indus Towers’ revenue from operations rose 0.8% quarter-on-quarter (q-o-q) to Rs 7,132.5 crore. The company’s net profit fell 4% q-o-q to Rs 1,295 crore in the July-September quarter.
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