Analysts added that Vi’s next round of investments in expanding its maze of 4G base stations are likely to come at marginal costs by way of loading charges, and potential tenancy expansions from future 5G roll outs too are at least 2-3 years away, further ruling out any material benefits for Indus in the near term.
said “the worst case for Indus Towers has been averted with (client) Vi remaining a going concern” after the telecom relief package. But, Vi, it said, “still has a long way to go as it needs equity infusion and a significant tariff hike for catching up on capex,” which is why the brokerage does not see “any material benefit to Indus in the near term”.
In its FY21 annual report, Indus Towers had said “any deterioration in the financial health” of large customers like Vi due to increased competition or the latter’s inability to raise further funds can affect their ability to pay for infrastructure services, which, in turn, would adversely affect the telecom tower company’s revenues, cash flows and overall financial condition.
Indus Towers, with 179,225 towers, had reported a 1% on-year dip in its annual profit after tax (PAT) in fiscal FY21 to ₹4,975.1 crore on annual revenues of ₹25,673 crore.
