Indus Towers Q4 and FY25 results: Full-Year profit soars 64.5%, Q4 dips marginally on airtel-linked adjustment

India’s largest telecom infrastructure provider, Indus Towers Limited, has reported a strong financial and operational performance for the fiscal year ended March 31, 2025. The company posted a consolidated net profit of ₹9,932 crore, marking a 64.5% year-on-year rise, supported by record tower additions, increased co-locations, and improved receivables management. Full-year revenues stood at ₹30,123 crore, up 5.3%, while EBITDA surged 41.9% to ₹20,845 crore, demonstrating healthy operating leverage and efficient cost containment.

However, the fourth quarter (Q4 FY25) painted a mixed picture. While consolidated revenues rose 7.4% to ₹7,727 crore and EBITDA increased 7.1% to ₹4,395 crore, net profit for the quarter fell 4% year-on-year to ₹1,779 crore. This decline was largely attributed to accounting adjustments following the acquisition of passive infrastructure assets from Bharti Airtel.

What Propelled Indus Towers’ FY25 Performance?

The company’s aggressive expansion strategy in FY25 proved to be a key growth driver. Indus Towers added 29,569 macro towers over the year, closing with a portfolio of 249,305 towers and 405,435 co-locations as of March 31, 2025. The infrastructure boost was supported by the strategic acquisition of 10,380 macro towers and 2,226 lean co-locations from Bharti Airtel during Q4.

This translated into solid financial metrics. Return on Equity (pre-tax) improved significantly to 44.2%, up from 33.7% last year, while Return on Capital Employed rose to 29.1% from 19.4%. Operating Free Cash Flow in Q4 climbed 72.9% year-on-year to ₹1,257 crore, and Adjusted Fund from Operations (AFFO) stood at ₹2,962 crore.

CEO Prachur Sah highlighted that FY25 was among the best years in terms of both tower and co-location additions. He emphasized the company’s ability to capture a significant share of its customers’ network rollouts, along with improved cash collection from a key customer.

Why Did Q4 FY25 Profit Decline Despite Strong Topline Growth?

While Q4 revenues were up, the quarter saw a 4% decline in net profit due to an accounting impact of ₹183 crore related to the common control transaction involving the Bharti Airtel asset acquisition. According to Ind AS 103, the transaction required a restatement of Indus Towers’ financials from November 2024, when common control was established. This led to an increase in depreciation and operating expenses for the quarter.

Notably, Indus Towers also wrote back ₹226 crore in provision for doubtful receivables during the quarter, which was aided by overdue collections from a major customer. This recovery underscores the company’s improved operational discipline in managing receivables.

How Did Key Metrics and Tower Economics Evolve in FY25?

Despite the large increase in tower and co-location numbers, some pressure was visible in tower economics. The average sharing factor declined marginally to 1.64 in FY25 from 1.69 a year ago. Sharing revenue per tower per month fell by 2.1% to ₹68,582, although sharing revenue per operator saw a 1.1% uptick to ₹41,893 per month. Revenue from lean co-locations also slipped 7.2% quarter-on-quarter, possibly due to changes in tenancy mix.

Nevertheless, Indus Towers’ pan-India presence across all 22 telecom circles and its role as a critical enabler of network expansion gives it a structural advantage in India’s evolving digital ecosystem.

What Does the Bharti Airtel Tower Deal Mean for Growth?

The Bharti Airtel transaction added critical scale to Indus Towers’ infrastructure portfolio. The acquired assets were fully integrated into Indus’ operations in Q4 FY25, and although they introduced non-cash accounting impacts in the short term, the deal is seen as strategically beneficial for long-term growth. The acquired towers are expected to generate higher tenancy opportunities over time as 5G rollouts gain momentum.

This acquisition reinforced Indus Towers’ status as a market leader in telecom tower infrastructure and illustrated its agility in executing strategic expansions.

How Are Investors Reacting to Indus Towers’ FY25 Performance?

Indus Towers Limited (NSE: INDUSTOWER) stock ended April 30, 2025 at ₹408.20, posting a 1.39% gain on the day. This closing price reflects growing investor confidence following the company’s FY25 earnings release. Over the past month, the stock has remained volatile, trading between ₹336.15 and ₹421.50, as markets digested the dual narrative of full-year strength versus Q4 softness.

Foreign Institutional Investors (FIIs) increased their stake in the company to 26.42% as of March 2025, while Domestic Institutional Investors (DIIs) held 18.41%. This rise in institutional holdings signals strong medium- to long-term confidence in the company’s fundamentals, despite quarterly fluctuations.

Brokerage houses are offering mixed views but lean toward a “Hold” stance. Analysts note the company’s compelling fundamentals—high return ratios, healthy cash flows, and dominant market position—as reasons for optimism. However, they are also cautious about short-term pressure on tower-sharing economics and customer concentration risks.

The company’s trailing P/E ratio of 9.11 is well below the telecom sector average of 14.01, suggesting that Indus Towers may still be undervalued in the context of its earnings growth and infrastructure scale. The stock is increasingly viewed as a strategic long-hold asset for investors seeking exposure to India’s telecom infrastructure backbone.

Can Indus Towers Sustain Growth Momentum into FY26?

Indus Towers is entering FY26 on a strong operational and financial base. Its tower additions, strategic acquisitions, and improved receivables recovery in FY25 have positioned it well to benefit from India’s accelerating 5G rollout and digital infrastructure build-out.

Looking ahead, investors will closely watch the company’s capex plans, tenancy pipeline, and efforts to diversify revenue streams beyond its current customer base. The company’s commitment to energy-efficient tower management and green initiatives may also serve as a key differentiator in ESG-conscious capital markets.

Despite the Q4 adjustment-induced profit decline, Indus Towers’ structural strengths remain intact. Its leadership position in a rapidly digitising economy continues to offer long-term upside, both for the business and its shareholders.