Indus Towers (Indus) has stated that most of its backlog receivables from Vodafone Idea Limited (Vi) have been recovered in 2024-25, contributing to a free cash flow generation of Rs 15.70 billion in the quarter ended June 30, 2025. Despite this, the company has opted to conserve cash in the short term, citing industry conditions, customer stability, high capital expenditure, and potential inorganic growth opportunities.
During the quarter, Indus’s trade receivables declined by Rs 4.06 billion to Rs 43.61 billion, aided by a Rs 880 million repayment from Vi in first quarter (Q1) 2025-26. The board’s decision to withhold distributions was described as a deliberate move rather than a change in dividend policy. The company clarified that accumulated free cash flows will be available for dividend pay-outs once distributions are reinstated.
Indus attributed its cash conservation strategy to a rising capital expenditure (capex) outlook, which includes investments in expanding its tower network, upgrading legacy infrastructure, and supporting higher tenancy. Maintenance capex reached Rs 11.9 billion in the first half of 2025, almost equalling the full-year spend in 2024. These investments include solar site rollouts, lithium-ion battery upgrades, and diesel generator additions.
The company anticipates elevated capex to continue over the next three to four years due to infrastructure upgrades. It also reported a marginal rise in 5G base stations to 487,000 in Q1 2025-26. While 5G rollout momentum has moderated, Indus noted that it remains a meaningful contributor to revenue and expects network expansion to continue as data traffic increases. Seasonal factors impacted first-quarter site additions, with rollout activity expected to pick up in subsequent quarters.
