Indus Towers sees profit dip as acquisition costs mount

Higher financing costs and accounting adjustments related to its acquisition of towers from Bharti Airtel weighed on Indus Towers’ bottom line, leading to a 4% year-on-year decline in net profit for the quarter ending 31 March 2025, the company announced on Wednesday. Despite this, the company reported a net profit of Rs 1,779 crore for the fourth quarter, with revenue rising 7.4% year-on-year to Rs 7,727 crore.

Return on capital employed improved significantly, rising to 29.1% from 19.4% over the same period last year. In a stock exchange filing dated 30 April 2025, Indus Towers disclosed that it had written back Rs 226 crore in provisions for doubtful receivables in Q4 FY25, aided by successful recovery of overdue payments.

Earnings were also affected by a one-off accounting impact stemming from the acquisition of telecom tower assets from Bharti Airtel earlier this year. “During the quarter, the Company acquired passive infrastructure assets from Bharti Airtel and accounted for the same as a common control transaction,” the company stated.

Indus Towers demonstrated strong operational growth, ending the quarter with a closing sharing factor of 1.63. The company added 14,662 macro towers during the quarter, bringing its total to 249,305 towers. Including the addition of 18,616 co-locations, the overall site count rose to 405,435. Of these additions, 10,380 macro towers and 2,226 lean co-locations were acquired from Bharti Airtel in a cash transaction valued at Rs 3,308.7 crore.

As a result of this acquisition, the company recorded an accounting impact of Rs183 crore for depreciation and operating expenses in its Q4 FY25 financials.

“We had another fantastic year in FY25, performing well across the board. As we continued to support a large portion of our clients' rollouts, we delivered one of our largest tower and co-location additions to date,” said Prachur Sah, Managing Director and CEO of Indus Towers.

“The acquisition of a significant tower portfolio further boosted our additions and highlighted our agility in driving growth. This has underpinned our robust financial performance, including strong cash flow generation. I’m also pleased to share that this year we made meaningful progress in recovering overdue payments through sustained engagement with a key client,” Sah added.

Acquisition of towers from Bharti Airtel

In February this year, Indus Towers announced that it would acquire mobile site assets from its affiliate Bharti Hexacom and parent company Bharti Airtel for Rs 3,308.7 crore.

The boards of Bharti Airtel and Bharti Hexacom have approved the sale of telecom towers for Rs 2,147.6 crore and Rs 1,134 crore, respectively. As of 31 December 2024, Indus Towers, India’s largest telecom infrastructure provider, had a portfolio of 234,643 towers and 386,819 co-locations across the country.

Airtel had announced that its board has approved the sale or transfer of approximately 12,700 telecom towers,including macro sites, ultra-lean sites (ULS), and Cell on Wheels (COW). However, sites covered under the Universal Service Obligation Fund (USOF) are excluded from the transaction. These towers will be acquired by Indus Towers. Separately, the board of Bharti Hexacom has approved the sale or transfer of 3,400 telecom towers to Indus Towers for approximately Rs 1,134 crore.