Indus Towers Q2 Results: Net Profit Rises 72%, Beats Estimates

Indus Towers Ltd. reported a 71.7% year-on-year rise in net profit for the second quarter of this financial year, beating analyst estimates.

The software firm recorded a consolidated net profit of Rs 2,224 crore for the quarter ended September, compared to Rs 3,456 crore in the same quarter of the previous fiscal year, according to its stock exchange notification. This was above the Rs 1,749.30 crore estimate by analysts tracked by Bloomberg.

Revenue increased by 4.7% year-on-year for the three months ended September, reaching Rs 7,465 crore. Analysts had projected revenue of Rs 7,587 crore.

In the second quarter, the company had a write-back of Rs 1,077 crore in provision for doubtful receivables, aided by collections against past overdues, the company said in its earnings release.

Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 42% year-on-year to Rs 4,907 crore. The Ebitda margin expanded to 65.7% from 48.5% in the same period the previous year. Analyst estimates for Ebitda and Ebitda margin tracked by Bloomberg were Rs 4,214.30 crore and 55.50%, respectively.

"Our operational performance reflects sustained demand for network expansion and our endeavour towards securing a larger share of our customers' rollouts. This continues to drive our financial performance, aided by steady collection of past overdues from a major customer," said Prachur Sah, managing director and chief executive officer of Indus Towers.

The shares of Indus Towers closed lower on Tuesday. The shares fell as much as 2.93% during the day to Rs 364.35 apiece on the NSE. The stock closed 2.29% lower at Rs 366.75 per share. This compares with a 0.28% decline in the benchmark Nifty 50. It has risen 106.27% in the last 12 months and 80.89% year-to-date.

Out of 21 analysts tracking the company, 11 maintain a 'buy' rating, four recommend a 'hold,' and six suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 13%.