Stocks of Indus Towers Limited rallied nearly 7 percent and currently trade at Rs 155. In the last 5 trading sessions itself, the company has been able to generate returns of around 11 percent for its stakeholders ranging from Rs 139 to the current price levels.
The company, this week, announced results for the latest quarter as well as for the financial year 2022-2023. Details of the same is discussed later on in the report.
Another recent development that took place in the company is the receipt of a significant part of the installment-based payments from Vodafone Idea (Vi) for the last quarter period. In October 2022, the company’s Board approved the payment plan submitted by Vi.
Indus Towers Limited is a leading service provider pertaining to the telecommunication tower infrastructure. It owns, deploys, and manages telecom towers and communication structures for mobile operators.
The company primarily generates revenue through rental fees which it charges to tenants for the mobile towers. Assets of the company are located in India and are often rooftop and ground-based towers.
Digging into the financials reported by the company, the revenues have slightly reduced in the latest quarter with a movement from Rs 6,765 crores in Q3 to Rs 6,753 crores in Q4.
On a contrasting note, the company has been able to improve its operating profits, reduce interest expenditures, and earn comparatively more from the other sources the company operates in. As a result of the same, the net profit numbers reported have seen a transition from net losses of Rs 708 crores in Q3 to net profits of Rs 1,400 crores in Q4.
Evaluating the above-mentioned metrics on a yearly basis, the revenues have increased from Rs 27,717 crores in FY21-22 to Rs 28,382 crores in FY22-23. On the other hand, the net profits moved down from Rs 6,373 crores to Rs 2,040 crores keeping the timeframe the same.
Having a look at the operational ratios, the return on equity (ROE), as well as return on capital employed (ROCE), has improved in recent financial years with the former increasing from 25.7 percent in FY20-21 to 33.53 percent in FY21-22 and the latter, during the same period, increased from 27.97 percent to 38.83 percent.
In addition to the above metrics, the company has been successful in reducing its debt-to-equity ratio with the most recent movement from 0.51 in FY20-21 to 0.25 in FY21-22.
As per the quarter ending March 2023, promoters of the company hold a 69 percent stake and the Foreign Institutional Investors (FIIs) hold a 26.63 percent stake in the company.
Written by Amit Madnani
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