Interest on dues from Vodafone Idea boosted Indus profits: Analysts
Indus Towers’ strong profits in the December quarter was boosted by an extra Rs 300 crore received from key customer, Vodafone Idea (Vi) as interest income on the latter’s old dues, said analysts.
They added that this is reflected in a 94.5% sequential jump in Indus’ other income to nearly Rs 602 crore in the third quarter, FY24. The Rs 300 crore interest income is in addition to the Rs 300 crore directly collected from Vi by Indus towards part-clearance of past dues.
“Indus’ higher net profit in Q3FY24, benefitted from higher other income, which had Rs 300 crore interest income from overdues,” ICICI Securities said in a note.
Indus’s net profit grew 19% sequentially in the December quarter to Rs 1,541 crore.
As per Citi Research, after the latest payments, Vi’s old dues to Indus is now at Rs 5,700 crore.
But, industry insiders, said this is most likely excluding the interest component on the past dues. Indus did not immediately respond to ET’s query on the total interest component on Vi’s backlog of past dues.
ICICI Securities, though, said that Indus’ strong cash collections in Q3FY24, including Rs 300 crore each collected towards past dues and interest on the over-dues, has improved the tower company’s cash conversion in 9MFY24.
Interest payments, typically, kick in if a telco tenant does not clear its dues beyond the credit period allowed in the master services agreement (MSA) with Indus.
The higher cash-conversion was helpful, in that, despite a significant jump in capex, India’s top telecom tower company was able to fund this through internal accruals.
Indus’ quarterly capex at Rs 2,653 crore was equivalent to 36.8% of revenue in Q3FY24. Capex for the nine-month period was Rs 7,200 crore, or 33.4% of
