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Indus Towers Ltd.’s (erstwhile Bharti Infratel Ltd.) pro-forma (post-merger) Ebitda came in 10% higher than expected at Rs 34 billion (up 19.6% year-on-year) due to:
Lower than expected energy losses, which has been unpredictable in past few quarters; and
Lower other expenses and negligible corporate social responsibility cost.
Net tenancy addition was higher at 4,128 (our estimate 3,500) on higher tower adds (3,715).
However, we are concerned about the sustainability of strong tenancy adds as Bharti Airtel Ltd./Reliance Jio Infocomm Ltd. recently bought huge quantity of spectrum, which may impact capacity-led tenancy demand, which indeed drives the sharing ratio.
Also, Vodafone Idea Ltd.’s going concern risk has not receded.
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