Document Context

This document is the transcript of the Q2 and H1 FY27 post-earnings conference call held on November 5, 2026, at 2:00 PM IST, submitted to BSE and NSE pursuant to SEBI Listing Regulations Regulation 30 read with Schedule III.

Operational and Business Highlights

Client Revenue Mix (H1 FY27)

The company's revenue is diversified across telecom operators:

  • Bharti Airtel: 48.5%
  • Jio: 19.5%
  • Vodafone Idea: 30% (a 3% increase compared to last quarter)
  • BSNL: 1.1% (decreased from 2.5%)

Infrastructure Portfolio

  • Total operational towers: 6,263 units
  • Total tenancies: 7,674
  • Sponsored tenancies: 4,129 (marginal increase)
  • Government site tenancies: 20+ added in H1
  • Fibre network: 6,510 kilometers across India (200+ km laid in H1)

Current Projects and Rollout

  • Actively working on 2,000+ additional sites for Vodafone Idea across India
  • Deployment pace is aligned with Vodafone's monthly/quarterly business plan and fund requirements

Business Model Explained

The company follows an infrastructure provider model:

  • Secures land/space on lease from site owners
  • Invests its own CapEx to build towers with power and fibre
  • Services towers to mobile operators for active equipment installation
  • Key revenue streams: IP fee (predefined in MSA), site rentals (reimbursed), loading charges (for upgrades), electricity/diesel charges (reimbursed)
  • All Master Service Agreements (MSAs) are for 15-20 years with 2.5% in-built escalation on IP fee and loading charges
  • No investment occurs without a confirmed service order from operators
  • 10-year lock-in periods prevent operator cancellations without significant penalty payments

Industry Outlook and Operator Plans

  • Vodafone Idea: Planning INR 45,000 crore CapEx over 18-24 months; targeting 45,000 sites in three years; Suyog targeting 5,000 of these sites
  • BSNL: Planning 16,000 site rollout by March 2027 (4,000 in Mumbai, 6,000 in Delhi, 6,000 rest of India)
  • Company strategically not counting BSNL towers in rollout plans until billing commences due to historical delays

Financial Performance (Consolidated)

H1 FY27 Results

  • Revenue: INR 717 million
  • EBITDA: INR 431 million
  • EBITDA Margin: 60% (maintained from previous quarters)
  • Net Profit: INR 153 million
  • Net Profit Margin: 21.4%
  • EPS: 13.09

Operational Metrics

  • Revenue per tower: Approximately INR 30,000 per month (marginal drop due to new tower rollout in Q2 where full-quarter revenue will be realized in Q3)

Capital Expenditure

  • H2 FY27 Planned CapEx: INR 200 crore (targeting 2,000 tenancies)
  • Funding: INR 120 crore from internal accruals, INR 80 crore from already sanctioned ICICI Bank debt
  • Historical CapEx allocation: 30% of FY26 CapEx went toward site upgrades for Bharti Airtel, generating additional loading charges of ~INR 2,500 per site

BSNL Exposure and Challenges

  • INR 30 crore CapEx invested for approximately 300 BSNL sites
  • Billing not yet started due to BSNL integration delays (Tejas equipment issues, fibre connectivity problems)
  • Company has communicated to site owners to hold rental payments until BSNL integration completes
  • Expectation: Billing to commence for pending sites in Q3-Q4 FY27
  • MSA terms require payment from RFI date with maximum 60-90 days waiver potential

Tax Payments

  • Total tax paid in H1 FY27: INR 8 crore (net of refunds)
  • Advance tax component: INR 1.5 crore

Management Guidance and Forward Commentary

Revenue Outlook

  • Quarterly revenue growth expected to be approximately INR 15 crore per quarter
  • Current quarterly revenue at ~INR 75 crore; target of INR 100 crore quarterly revenue by September 2027
  • Actual growth dependent on operator monthly/quarterly rollout plans

Capacity and Execution

  • Company claims capacity to deliver 1,000+ sites monthly
  • Execution pace is deliberately aligned with operator integration capabilities to avoid billing delays

Technology Initiatives

  • Zinc battery deployment: Completed on 4 sites; monitoring results before broader rollout

Market Opportunities

  • Expecting additional orders from Jio post its IPO
  • Telecom industry growth viewed positively for future quarters

Q&A Key Takeaways

CapEx Security

  • All CapEx investments are made only after receiving confirmed service orders
  • MSAs include 7-10 year lock-in periods with exit clauses requiring 10 years of payment if operators cancel post service order release

Vodafone Rollout Timing

  • Vodafone's 45,000-site plan is confirmed but monthly/quarterly rollout will vary based on their funding availability
  • Suyog's delivery pace matches Vodafone's prioritized site requirements

Financial Impact

  • Q3 expected to show revenue jump as full-quarter billing begins for 356 tenancies added in Q2
  • Additional revenue potential from ~600 sites (356 Vodafone + 300 BSNL) awaiting full billing cycle
  • Revenue per tower expected to maintain at INR 30,000-31,000 level