Vodafone drive ignites growth, but PAT slumps; BSNL now cautious

Q1 revenue grew 30% YoY but PAT declined 16.3%, offsetting topline gains

NPM reported 19.8%, EBITDA 59.3%; PAT fell despite 30% revenue growth due to IndAS impact + cost escalation

186 sites still pending revenue; Tejas equipment issues unresolved; management now cautious, waiting for billing confirmation

150 delivered in Q1 (mid-June start); 700 in pipeline; 3,000 is flagged as 'conservative' and conditional on Vodafone funding

Confirmed at ₹31,000-₹31,500 for last four quarters, maintained despite 'stagnant' Q1

FY26 guidance: BSNL 2-lakh site rollout major upside. Current: 186 sites pending 18 months, Tejas issues unresolved, management will not commit until billing confirmed. Explicit caution: 'let it come on ground.'

Prior call hinted 12,000+ by year-end. Current: 3,000 from Vodafone + existing 7,000 = 10,000 (later refined to 10,500). Analyst Varun Ghia caught this; mgmt explained 3,000 is 'conservative' based on SBI's ₹6,400 Cr disbursed (vs ₹45,000 Cr plan).

Vodafone rollout began mid-June; Q2 expected 'lower' due to rain. Management guides: 35-40% H1, 60% H2. Full FY27 growth benefit only in FY28.

Q1 FY26 had 25% PAT (VI reversal). Q1 FY27: 20% with electricity reclassification + IndAS impact. Management claims sustainable at 20%, but underlying unit economics deteriorating.

Contract manufacturing from GBB Batteries (Kerala plant, ex-Apple battery head). Cost saving ₹48,000 (lithium) → ₹33,000 (zinc). No new revenue; reduces CapEx and operation costs. First deployment Sep 2026.

Very confident. Daily loadings ongoing, met with Vodafone CTO Jagbir Singh, central team happy. 700+ in pipeline beyond 150 already done. Execution capacity & funds in place.

Cautious because prior numbers were not achieved due to Tejas equipment issues. Already have orders in hand but not executing. Will only commit once BSNL confirms billing start date and Tejas resolved. Optimistic but protecting credibility.

3,000 is conservative based on INR 6,400 Cr Vodafone funded so far. As additional SBI funding approved, will increase target. Committed to 3,000 based on visible funding from SBI phase 1.

Q1 FY26 had VI reversal benefit (one-time, 25%). Normal run-rate is 20-21%. IndAS also impacts first 5 years of long-term rentals (notional loss front-loaded, then reverses).

True for every company—dependent on customers. Vodafone very aggressive, SBI backing them, Aditya Birla on board. BSNL execution will decide. Waiting on customer confirmations.

MD: 18-month standstill due to BSNL payment issues, industry headwinds. To jump ahead, must come back 2 steps. Clear vision: hit ₹100 Cr quarterly (₹400 Cr annual) with 10,000 tenancies, grow PAT margin to 24%.

Targeting 1.8x by FY29 (not 2.0x). Macro sites drive higher tenancy. ROI: 1 tenancy = 3.5-4 yr payback; 2 tenancy = 24 months; 3 tenancy = 18 months. Large PAT jump when sharing ratio rises.

Fibre ~5-8% of revenue; similar EBITDA margins as tower IP1 model (70%). Vodafone sites mostly on microwave (no strong fibre network). Fibre upside in future FTTH rollouts, not material in FY27.

Started with 1,000 pending; now 186 (progress slow). Q1 no additions (Tejas busy). Tejas issues in control per recent news; expect Q2 revenue start for 186 sites.

Currently ₹71 Cr/Q; 5.6x growth over 3 quarters. Contingent on 3,000 Vodafone rollout (150 done, 700 in pipeline, 2,150 balance). Rain impact Q2.

Visibility based on SBI phase 2 funding approval (pending). Combined with FY27 3,000 → cumulative 8,000-10,000 tenancies over 2 years.

Electricity cost normalization already in base. Zinc battery CapEx savings help. But IndAS notional loss on long-term rentals suppresses reported EBITDA first 5 years.

Q1 delivered 19.8% (below 20% claim). Management hedges: accounting impacts, IndAS muting. Long-term: margin to grow to 24% once 10,000 tenancy base achieved (per MD).

Zinc battery saves INR 15,000/site (₹48k → ₹33k). Keeps overall CapEx within budget. Macro site trend supports higher sharing ratio going forward.

Vodafone represents 27% current, targeting 30-32% post-3,000 rollout. Airtel 48% stable (no major rollout). Loss of Vodafone or Airtel's capex pause would cripple growth narrative.

Vodafone secured ₹6,400 Cr from SBI; plans ₹45,000 Cr over 18-24 months. Suyog targeting 3,000 tenancies (10% of Vodafone's 30,000 site plan). But only 12,000 sites planned through Sep, and only for ₹6,400 Cr tranche. FY27 3,000 target requires phase 2 funding (₹25,000+ Cr) approval from SBI within next 2 quarters.

Prior FY26 guidance suggested BSNL as major upside (2 lakh site 5-year plan, ₹77,000 Cr capex). Current reality: 186 sites pending billing since Q3 FY26, no progress in Q1 FY27. Tejas equipment issues blamed, but management now cautious ('let it come on ground'). BSNL plan now contingent on Tejas resolution confirmation + billing restart, not a credible FY27 catalyst.

Revenue ₹71 Cr (+30% YoY) but PAT ₹14.5 Cr (-16.3% YoY). NPM collapsed from 25% (Q1 FY26) to 19.8% (Q1 FY27). Management blames: (1) electricity reclassification, (2) IndAS notional losses on long-term rentals (first 5 years). But underlying costs rising faster than revenue (salaries, battery CapEx, operations).

3,000 Vodafone tenancies → 80% on new towers (2,400 new towers), 20% on existing (600 anchor). Current base: 6,103 towers. Adding 2,400 new towers = 39% capex increase, revenue deleveraging until tenancy ratio rises (currently 1.2x, targeting 1.8x by FY29). Long payback on new towers (3.5-4 years on single tenancy).