Jobaaj Stories
The fourth quarter of 2023, which concluded in March, saw a 23% fall in net profit for Indus Towers, a major provider of Telecom Infrastructure. Net profit for the company was INR1,399 crore, down from INR1,828 crore in the same period last year. The increase in provisions against doubtful debt and advances for FY23 is to blame for the fall in profitability.
The major customer of the tower provider, whose name was withheld, has been cited as the main cause of the drop in net profit due to collection issues. As per Indus Towers, The entire amount owed by this customer is around INR7,000 crore ($943m).
Despite these challenges, Indus Towers' CEO, Prachur Sah, remains optimistic about the company's growth prospects. Sah has stated that new 5G rollouts and tower deployments will be the key drivers of growth going forward. The company is all set to take advantage of these opportunities, given its strong market position and expertise in telecom infrastructure.
Looking at the full fiscal year 2023, Indus Towers' consolidated revenues rose 2% YoY to INR28,382 crore. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) were INR 3,447 crore for Q4FY23. However, the consolidated net profit for the full fiscal year declined by 68% YoY to INR2,040 crore.
To address the collection challenges, Indus Towers has made an incremental provision of INR 43.4 crore towards doubtful debt in the period of January-March. The company remains committed to ensuring that its financials remain healthy and is working closely with its customers to address any payment-related issues.
In conclusion, Indus Towers has reported a decline in net profit for Q4FY23 due to collection challenges from its biggest customer. However, the company remains optimistic about its growth prospects, given its strong market position and expertise in telecom infrastructure. The tower provider's long-term financial stability depends on the health of its biggest customer, making it crucial for Indus Towers to work closely with its customers to address any payment-related issues. Overall, Indus Towers is well-placed to take advantage of new 5G rollouts and tower deployments, which will be the key drivers of growth in the near future.
- Nishtha Babbar
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