Indus Towers Limited (INDUSTOWER) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm Nir, the moderator for this conference. Welcome to Indus Towers Limited First Quarter ended June 30, 2026 Earnings Call. [Operator Instructions] Present with us on this call today is the senior leadership team of Indus Towers. Before I hand over the call, I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. I now hand over the call to our first speaker of the day, Mr. Prachur Sah. Thank you, and over to you, sir.

Thank you, Nirav, and a very warm welcome to all participants. Joining me today are my colleagues, Mr. Vikas Poddar, CFO; and Mr. Dheeraj Agarwal, Head Investor Relations on the call. Today, I will present our business performance for the quarter ended on June 30, 2026. Rollout momentum remained healthy during the quarter, supported by continued network expansion by our major customers and movement of their expired [indiscernible] portfolios to Indus. We continue to maintain leading share in the customer deployments, resulting in significantly larger tenancy growth than our peers, driven by strong execution, service reliability and technology-led operations. Before I delve into our performance, I would like to recognize the dedication and commitment of our field teams. Despite operating in some of the country's most challenging conditions, they delivered acceptable resilience, enabling timely connectivity along the [ Amara Katra route ]. They also maintained network continuity, advising flood affected Arunachal Pradesh through swift restoration efforts, proactive planning and strong local coordination. On the regulatory front, as I had mentioned earlier, the RoW rules 2024 have now been implemented across dia, which will continue to benefit in seamless enjoyment of telecom infrastructure. Regulatory developments in Uttar Predesh, Rajasthan and Delhi further strengthened the Green Energy Open Access framework, expanding renewable energy adoption opportunity for telecom infrastructure. I would like to call out the unparalleled support from the government and regulatory authorities for ensuring fuel availability for the industry despite restrictions imposed on account of the Asia conflict. This helped us maintain uninterrupted operations. Moving to 5G networks. As per the latest report from TRAI, 5G subscription base in the country grew by 36 million in Q4 FY '26, totaling to over 427 million. The rising adoption of 5G is driving the demand for creating infrastructure to support the user experience. This is resulting in consistent 5G deployments by operators taking the installed base of 5G BTSs to 5,63,000, up by 32,000 in Q1 FY '27. Operators continue to focus on network densification and capacity augmentation to support rising data consumption and evolving use cases. We believe this will sustain investments in network expansion and support loading led growth. We are well positioned to capitalize on the growth opportunity through our expansive tower footprint and long-standing customer relationships. Data consumption trends continue to remain robust, reflecting the deepening indication of digital services into everyday life. As per TRAI's latest publication, the total data consumption and average monthly usage per user during Q4 FY '26 grew by 31% and 20% year-on-year, respectively. The shift towards 5G networks has further accelerated this trend. According to TRAI, 5G usage loan grew 87% year-on-year, accounting for 43% of digital data traffic in Q4 FY '26, up from 30% in Q4 FY '25. These trends reinforce the need for sustained investment in network capacity augmentation, deeper coverage to meet rising customer demand, enabling growth opportunities for us. In terms of operational performance, order booking remains strong from our major customers. We added almost 3,100 macro towers and 4,200 corresponding co-locations during the quarter. resulting in a year-on-year growth of 6.3% and 5.1% in tower and colocation base effectively. As a result, the total macro tower in colocations stood at around 267,600 and 432,300, respectively. Our industry-leading tenancy ratio was stable at 1.62. Including lean towers, we ended the quarter with approximately 446,300 towers. Let me provide an update on our key KPIs, making our network green and eliminating diesel usage is central to our strategy. We added solar access to about 3,700 sites during the quarter, taking the overall site count with solar access to about 46,000. We believe that there is significant runway to solarize our tower portfolio. Diesel consumption on our side has seen a reduction of 13% year-on-year in Q1 FY '27. This is achieved despite growing co-locations and continued network loading at our sites. I want to underscore that [indiscernible] delivered while maintaining network of time and customer experience. Our network reliability remains robust with an uptime of 99.95%. I will now provide an update on our key strategic pillars, market share, cost efficiency, network of time and sustainability. On market share, we have further strengthened our position with the customers, captured a healthy share of their network expansion and movement of the existing tens -- existing expired niches to Indus. Our performance is underpinned by dedication of our people, strong execution by our partner ecosystem and operating processes that help navigate supply chain disruptions while retaining high standards of safety and quality. During the quarter, we further expanded our product portfolio with integrated IVs and build-to-suit hybrid solutions designed for large residential and commercial complexes. Metro stations, tunnels, highways and marquee government establishments. These differentiated offerings have enabled us to further consolidate our leadership position and enhance our ability to address evolving connectivity requirements across a wider range of infrastructure use cases. Cost discipline remains a core pillar of strategy and deeply ingrained across the organization. Leveraging data intelligence and standardized operating frameworks, we continue to do structural improvements in site rental, supply chain efficiency, infrastructure costs and partner management. Digital interventions are driving operating efficiencies in many ways, including improved field force productivity, enhanced network reliability through productive maintenance, automation of manual processes, et cetera. However they have started to deliver tangible outcomes. We believe that there are opportunities available to drive significant efficiencies. Energy management is a key focus area from both a cost and sustainability perspective. During the quarter, we accelerated renewal energy deployment, expanded battery modernization initiatives and further strengthened digital energy management capabilities, contributing to a 13% year-on-year reduction in diesel consumption. In addition, we have undertaken an ambitious program to replace diesel-based operations across a large portion of our sites with lithium battery banks. This quarter was constrained as battery supplies were impacted due to ongoing geopolitical disturbances but we expect to pick up steam on this project in the coming quarters. On CapEx optimizing, we have launched an internal platform aimed at simplifying tower design and site planning for our tower engineering teams, which will support the efficiency agenda. Our third priority network of time remains fundamental to the reliability we deliver to our customers. It is a critical measure of service continuity and operating excellence. By strengthening visibility across the network and enabling faster, more precise field interventions, we are enhancing site availability, improving response quality and building a more resilient operating backbone. This has resulted in year-on-year improvement in network stability. We have continued our ambitious digital operations transformation program that remains a key enabler for network reliability and operating efficiency. Leveraging Teletry, IoT connectivity, AI-led image analytics, automation and leading workforce management application of [indiscernible] from digital services. The ambition is to turn Indus into a technology-driven enterprise, setting injury benchmark on how to operate distributed assets at scale. These capabilities are driving measurable improvements in workforce productivity, self-assurance, energy [indiscernible] Our commitment -- coming to ESG are coming to sustainable growth and inclusive development continues to translate into meaningful outcomes. As part of our decarbonization strategy journey, we have expanded our renewable energy footprint solar deployments during the quarter, reaching an installed base of 259 watts. We also continued scaling up energy storage solutions to reduce diesel dependence and lower our carbon footprint. On the people front, our employee-centric cultures were recognized with the Prestigious 13 Gallup Exceptional Workplace Award. We further strengthened our safety agenda through the launch of a campaign focused on enhancing material handling practices across our operations. In CSR, we remain committed to positively impacting 150 million lives by 2030. During Q1, our flagship programs, [indiscernible] along with [indiscernible] Foundation, touched approximately 12 million lives across education and skill development, diverse and inclusion, digital entity, health and hygiene and community development. Our flagship initiative, Nari Saman, which promotes health and hygiene touch 11 million lives in Q1, reaffirming its impact on success. Our annual assessments and targeted capability-building initiatives continue to help foster a more resilient and sustainable value chain. I will now talk talk briefly about our Africa foray. Our progress is on track as major milestones have been achieved. We have now received regulatory approvals and operating licenses across all 3 target markets: Nigeria, Uganda and Zambia. I'm happy to share that we have secured orders from our [indiscernible] customer, key supplier orders and initiated partner onboarding process for network operations. The rollouts are expected to commence in the next quarter and sales scale progressively across markets. We see an opportunity to create a strong foothold underpinned by our core strengths, high-quality service, delivery speed, reliable repo operations and cost-efficient infrastructure deployment. I would now request Vikas to take you through our financial performance for the quarter ended on June 2026, and I look forward to your questions. Thank you, and over to you Vikas.

Thank you, Prachur, and good afternoon, everyone. I'm pleased to present our financial results for the quarter ended 30 June 2026. The customer network expansion activity remained healthy during the quarter. supporting a steady financial performance and continued strong flow generation. Talking about the financial performance for quarter 1 of FY '27. Gross revenues grew by 4.6% year-on-year to INR 84.3 billion. Core revenues from rental were up by 5.2% year-on-year to INR 53.7 billion, supported by addition of both towers and colocations by our customers. A major customer continues to expand its footprint after resuming its network expansion in 2024. On a sequential basis, our reported gross revenues and core revenues grew by 4.1% and 1.2%, respectively. A 9.5% quarter-on-quarter increase in energy revenue aided the gross revenue growth driven by seasonality led increase in diesel consumption and increase in these prices. Moving on to profitability. Reported EBITDA was up by 3.0% year-on-year and 1.2% quarter-on-quarter to INR 45.2 million. The EBITDA margin was lower by 1.5 percentage points year-on-year and 0.9 percentage point quarter-on-quarter at 53.6% in quarter 1. Please note that in quarter 1 of FY '26, there were write-backs of approximately INR 0.9 billion relating to collection of overdue receivables from a major customer. Adjusting for this, our EBITDA grew 5.2% year-on-year. Our energy margin was 4-point -- negative 4.6% in quarter 1 compared to negative 3.6% in quarter 4 and negative 4% in the corresponding quarter last year, primarily reflecting seasonal factors and the back of fast period settlements. Encouragingly, our diesel consumption reduced by over 13% year-on-year supported by digital energy management initiatives, fuel monitoring systems, solar deployments and lithium-ion batteries. We remain focused on improving energy efficiency and strengthening margins through continuous transformation of our energy management practices. Our profit after tax was up by 0.5% year-on-year, down by 2.7% quarter-on-quarter to INR 70.5 billion. Adjusted for the aforementioned one-offs, our profit after tax grew by 4.8% year-on-year. The sequential decline primarily reflects a lower tax charge in quarter 4 last year, resulting from year-end tax adjustments. Our return metrics remained healthy with pretax return on capital employed of 25.4% and post-tax return on equity of 18.9% over the last 12 months. Free cash flow remained rose at INR 14.4 billion during the quarter, reflecting healthy operating performance and disciplined capital allocation. To summarize, we delivered a resilient financial performance during the quarter supported by continued customer rollouts, disciplined cost management and robust cash flow generation. We also made progress on our Africa expansion strategy and remain on track to commence rollouts within this calendar year. As supply chain conditions improve, we expect deployment activity to accelerate and support execution of our order book in the coming quarters. With that, I'll now hand it back to the moderator to open the floor for questions, please. Thank you.

[Operator Instructions] First question is from the line of Vivekanand Subbaraman from AMBIT Capital.

I have two questions. The first one is on the rental income growth versus the growth in co-locations. So I see that whether 1 looks at it on a year-on-year basis or sequential basis, the rental income growth is mirroring co-locations growth -- so just to understand this better, there is a 2.5% escalation. I understand that there is equalization accounting, but then you also have renewals that come up every year, which implies that the 2.5% escalation even after a revenue equalization translates to some revenue. So I just want to understand from you why is it that the rental revenues are not going much faster than the co-location growth? That's question one. And secondly, when it comes to your engagement with and you have many synergies with one of them being in Africa, the second one being the in-sourcing of towers by Airtel. And the third one, obviously, Airtel wanting to purchase more stake in your company. So just trying to understand better on each of these 3 points, how Airtel is thinking? And what are the markers here on?

Maybe the first one.

So thank you, Vivekanand, for the question. I think you're right. See, as far as the rental income is concerned, of course, the biggest source of growth is the the expansion in the tower and co-location. You are correct that the next source of growth is the escalation that comes in. But what happens is, first of all, the growth from escalation or the growth from, let's say, 5G loading, et cetera, are much smaller compared to the growth that is driven by the co-location and the current additions. Two, I think there are basically drags within the revenue rental line in the form of, let's say, whenever we have renewals, we do have to give the discount on renewals as per the framework agreed. And also the fact that the revenue equalization because the first set of bulk renewal had happened back in 2021, '22 financial year. So a lot of them are actually reaching a point where the revenue equalization is also sort of dragging the growth a bit because we are almost in the fifth, sixth year of those towers. So everything put together, I think broadly, what you see in the numbers is basically a growth number that is closely mimicking the tower and the co-location growth. And somewhere the escalation and loading led growth are sort of offset by the the revenue collection as well as the renewal discounts.

Now on the second question, if I understand the question correctly, you're saying is how is Airtel's synergies adding value. I mean you mentioned a couple of points, I'll probably just touch 1 or 2 on them. See, from an Africa perspective, where the value that is getting created is as we are expanding in Africa, from day 1, we have an anchor tenant, that fundamentally enables us to confidently expand knowing that we have a tenant on that tower, which in other case, you would have to look for running. So I think that is enabling us start up much faster in Africa. And secondly, there's enough leverage in terms of the experience being present in Africa for us to be able to expand. So I think synergies where it creates value for both, I think, are being looked at and we are looking to see how we can maximize the advantage of the synergies. And similarly, from a tower -- India towers perspective, we have seen the growth that over the last 3, 4 years, with where we have expanded at a significantly large pace in terms of a tower additions, which has also created the opportunity for us to be present in large part of India and have a room available for a second tenant as much. So I think that how we are leveraging the synergies to make it -- create a maximum value for both Indus and parent company, that's answering the question. And that's what I thought.

Just a couple of follow-ups. So number one, there is some in-sourcing by Airtel, which is allowing you to add towers at a faster pace than the overall footprint, tower print expansion for Airtel. But I just want to understand if this is actually a very good strategy because if Airtel were to exit from a rival tower company, then surely the non-Airtel customers may also then look to exit or ask for more discounts than what you would already be -- have been providing. Because like you said last time, the geo contract is still not renewed. So I'm just trying to understand better is the in-sourcing really helping you because you may currently have a tower currently, which is, say, two tenancy or 3 tenancy. And for Airtel when you, let's say, build a new tower, where it sources the network from a party TowerCo to your company? Could there be a possibility that you may lose out on the second customer and already existing tower where Airtel is already present? That's what I'm trying to understand.

No, I'm not sure how would that lose a tenant because at the end of the day, you're -- whenever I see for us, we don't look at the -- when we are adding towers, honestly speaking, we don't look at whether it is coming through an ingesting strategy or not. I think our strategy is very simple. If you have an order book from a customer, we execute. Now the strategy belongs to the customer in terms of whether it's moving a tower or creating a new tenancies. And I don't think there is a net loss of tenancy because of the strategy anywhere for us. I think it's reflected in our numbers as well. I think if you look at the numbers that you have seen in the last few quarters, it is reflective of that. So I don't see a risk as far as that strategy is concerned at all.

Okay. Sure. That's great. The last one, which I was asking on Airtel was with respect to the steep purchase that they were doing. I mean, are there any conditions? Or is there any -- anything that you would like to discuss in that regard, which will help us understand its intent with shareholding in industry?

No. I think it's a discussion that you would have to have with the -- in the Airtel's earnings call rather than us.

Vivekanand, its a shareholder matter. Basically, it is absolutely their vision. There's no condition attached. So it's very difficult for the management to comment on this.

Next question is from the line of Manish Adukia from Goldman Sachs.

My first question actually just a follow-on on Vivekanand's question and also to you mean that part of your growth was driven by moving of the pie portfolio of one of your customers to Indus. I wanted to just understand it a bit better. Is that now largely done or basis whatever visibility you have that as a driver could still continue in the foreseeable? If you can maybe just add some more color to that, please. That's my first question.

So Manish, I would not -- to be honest, I would not like to comment on the breakup of the growth itself. What I can say very clearly is for the next foreseeable future over the next 3, 4 quarters, we have a very strong order book, which is a combination of network expansion and moving of towers of tenancies. So I think all I can comment on is that we still have a very strong order book for the next 3, 4 quarters. In the previous quarter, the initial part of the quarter was slightly impacted with the geopolitical situation where we sell because the tower manufacturing got impacted a little bit due to the LPG shortage, which has now been recovered. So I think we continue to have a very robust order book and we'll continue to expand, whether it's through network expansion or movement of towers as the case may be.

Very clear. Second question, again, just a quick clarification on your year comment on energy margins. So when you said that energy margins were partly also impacted due to past period settlements. Can you again maybe explain that a bit better as to what do we mean by that?

Yes, Manish, I think -- so that's basically the major impact is from seasonality, but there are basically certain settlements that do happen with the time lag. So we have had, let's say, some settlements during the quarter, which pertained to last financial year also. And as a result, there has been some impact, but these are basically much smaller. I think the bigger impact comes from the seasonality.

Right. And like given the history in recent quarters and years, is it safe to assume that, generally, you will have a 1H where energy margins will be weaker and as we approach to ethos should get better direction?

Yes, yes. That's the nature of the business because we basically end up consuming a lot of diesel during the 1H first half, simply because of very heavy monsoons and so on. So we do have -- we do face a lot of the disruptions. Second half is usually better. So that's been the nature and you will see that pretty much in most of the years. I mean that's the phenomenon that we have been facing. But at the same time, I just want to sort of also highlight that while we do have these impacts come from diesel, but the fact that we are also trying to transform our entire energy operation, focusing more on renewables as well as batteries and so on. I think that will help us reduce our dependency on diesel going forward in the forthcoming years. So from that perspective, I think we should be able to sort of mitigate a lot of these seasonal impacts, maybe a few years down the line, but currently, that's what it is.

Very clear. And maybe just last question on Africa since you called out it now, would come in starting next quarter. Would you be able to provide any more color and visibility in terms of one let's say, from a 12-month perspective, what could be incremental tenancies in -- from Africa look like? And from a near-term perspective, at least, what could -- like at a group level, could these Africa rollouts be margin and return dilutive? Or do you have enough visibility on at least margins and returns being around where group level margin returns are? That's my last question.

So I think I'll answer the first question, maybe returns part, Vikas you can comment on. I think as far as the numbers of tenancies and towers is concerned, I think I just want to say this is something that will start picking up in quarter 2. And since we follow a practice of industry-leading disclosures, the numbers would come as it becomes material, and we'll start, you'll start seeing the disclosures happening accordingly. You want to comment on the margin?

Manish, I think as far as the financials are concerned, I think, first of all, let me just explain that. We are still working through the MSA and the rate cards and all the commercial arrangements, because one of the objectives for Indus to sort of be in that market is also to generate more efficiency and more value for all the operators and not just Airtel as an anchor, but for all the operators in the market. So while we are in that sort of discovering and finding those sources of efficiency and basically try and reduce the both CapEx and OpEx cost per tower, I think as we sort of stabilize and as we become slightly more mature than that, I think that's when we will start sort of seeing more stability in our financials. So currently, it's a lot of moving numbers and we are still discussing MSA and rate cuts and that stuff. So a bit of an early stage for us to comment on the financials and the returns, maybe a few quarters down the line, we'll be more clear about it.

Got it. Just a clarification on that comment. As of right now, we are working with one anchor tenant, but do we in any of the 3 countries have [indiscernible] from a 12-month perspective where we may also have a second tenant? Or right now, it's just too premature to have that visibility on maybe a potential second customer?

So I would not say one way or the other. I think what we are doing is, as we're establishing our ground presence, and we have an anchor customer, we are engaging with the other customers as well and creating a value proposition for them. And I'm sure as we expand that opportunity will be there from growth. So I cannot say whether it's going to be 12 months, 15 months or 3 months, but that's an opportunity that we have in mind as we expand the footprint.

Next question is from Rishabh from HSBC.

Appreciate the clarity around Africa business. But since we are planning to roll out next quarter, even though we are not discussing the group level impact, is there any indication on the unit economics, like what is the cost expected CapEx per tower or expected lease rental per tower, if anything can be shared on the both line? And secondly, if we can discuss some -- because have more color on the order book from India. Like what proportion of incremental tenancies in last 3, 4 quarters are actually coming from Vodafone Idea. And how should one think about the order book going forward? Like especially in Vodafone Idea or working on the capital base, so any comments around that, we appreciate that.

So I'll first talk about the India part and then maybe Vikas touch base on Africa. So on the India part, as we mentioned earlier, I think the order book remains strong, and you've seen the results that we have shown in Q1 rollout, where Q1 was slightly impacted by the tower manufacturing in the initial part due to the West Asia conflict, which has now been resolved. So given that situation, you've seen the rollout that have happened in Q1. So I personally think our -- I mean, I know for a fact that our order book remains strong. And I think the momentum that we have seen in Q1 would be maintained or improved as we improve the cover supplies. So I think that's the visibility I can give you that we have a strong order book for at least next 3, 4 quarters that we have visibility on. And as it was, we'll keep you informed. The question in Africa The unit economics. I think the unit economics of Africa, as I mentioned earlier, I think, listen, as we we will follow the practice that we have followed here as well, that we'll keep having quite a transparent disclosure on this one as we finalize things. As Vikas was mentioning, we are currently finalizing the terms of the everything. So let us have that visibility. And once they start rolling out, we have a clear disclosures on what the margins sit out from Africa would be. So as of now, not like to comment on the numbers per se, as such.

Next question is from Sachin Salgaonkar from Bank of America.

I have three questions. First question, I just wanted to better understand the visibility on the order book what you guys are having. Is it contingent on one of your customers raising capital or irrespective of whether capital is raised or not, there is a good visibility on order book? And the related question was clearly structure you indicated there were certain supply chain disruptions, which happened at the start of the quarter, the geopolitical issues still continue. So are the supply chain issues largely behind us or we may see some impact of that in the future as well?

So Sachin, I think the visibility of order book, I think as I mentioned earlier, I think we have visibility of the order book that is firm for the next 3 to 4 quarters. And as I mentioned earlier, we have seen the orders coming through in Q1, and we have delivered that. So I think that order book stability is there, irrespective of what the funding situation is. As far as supply chain issues are concerned, I think there was some reconfiguration done by the suppliers in terms of how they manufacture towers and how the LPG impact was mitigated. So I don't believe from a supply chain perspective, tower supplies would be a constraint to deliver in Q2, unless there is some event that happens, which we are not currently aware, but as of now for quarter 2, we don't believe supply chain will impact the tower growth. There is some impact on the battery supplies, which we believe will start recovering from August, but that is not impacting the tower growth. we have the material available for delivering new towers as per the order book. So I think the supply chain disruptions from a tower supply point of view is behind us. So I think that's what I think.

If I may just add some perspective on the order book, Sachin, I think, broadly, I mean, we track the numbers very closely. And for all our customers, we basically also ensure that whatever their plans or expansion plans are, we are able to garner the bulk of the market share from them. So, that is what we keep tracking. And we have sort of successfully been doing that with a bigger portion of the market share.

Got it. And a follow-up to that is tower additions were a bit slower in 1Q. Now that the supply chain disruptions are behind, we should see the tower addition normalized to your historical growth going ahead, right?

I mean, I don't want to say -- I don't know, historical growth is our industry are looking at. I think, as I said, I think Q1 initially, April -- I don't think Q1 full quarter was impacted. Initially, in April, we had some impact of the tower supplies, which is behind us. So I think the tower growth will be there as per the order book. Exact numbers, I think we'll see how we deliver and monitor supplies. In Q2, typically, sometimes we are impacted on the -- in some states because of the monsoon situation as well due to water lagging, et cetera. So that may impact a few states in terms of their growth. So I think that number keeps fluctuating a little bit in terms of what is the on-ground situation. But from an order book perspective and the delivery, I think the order book is strong and we'll try to maximize delivery in the coming quarter itself.

Got it. My second question is regarding your Africa. And while in 3 countries, we get a sense that your MSAs are in place. Any sense now in the kind of investments that are expected to be made out there? And this is also, in sync. I presume these investments are relatively much smaller. So I presume we should expect a continued stable dividend payout framework and it is unlikely to be impacted because of this entire Africa investment program, right?

So I think I'd like to answer the dividend question first. I think as we have mentioned earlier, that the Board is committed to distribute dividend and distribution of cash to the shareholders in one form or the other. So that will continue. I think Africa is a long-term strategy, and it is not one or the other. I think dividend is a separate track and it is going to be, I think, Board committed -- is committed to distribute the FCF and it will not be impacted by the Africa expansion. So I think that's the one part. As far as the numbers of Africa is concerned, as I mentioned earlier, that as we start deploying and we'll follow the practice of full disclosure, as we have been doing in India, and you start getting a hang of the numbers as soon as far as Africa is concerned.

Next question is from the line of Saurabh Handa from Citigroup.

Two questions from me. Firstly, on exits. We've noticed that the trend, at least on a year-on-year basis is largely stable at around [ 300, 350 ]. It's down Q-o-Q. Could you talk a bit about this? I mean, I'm guessing this is business as usual, but given that with one of your tenants, you have previously spoken about tenancies coming up for renewal. Any further updates on the discussions on that front?

No. I think, in fact, if you see in this quarter, the performance was quite good. We have put some specific efforts as well in business as usual to reduce the we churn by making sure we have proactive renewals, and we stage because typically, we have a lot of operational churn that happens. So I think we maintain the operational rigor as usual. As far as the tenancies and renewals, it's a constant discussion with the customer, but we continue to maintain a high quality of service, and we have not seen any major disproportionate churn happening from any of the customers.

Okay. That's great. And the second question was actually just a follow-up on one of the earlier questions on Africa. So you did say that the CapEx in Africa will not impact your free cash flow and distributions. So essentially, are you sort of clarifying that it would be the India free cash flow, which will be used for distributions to shareholders? And Africa CapEx will be separate. I mean, it could be debt funded or whatever, but that may not influence your distributions in India?

Saurabh, so let me clarify that. I think first of all, as far as Africa is concerned, while we are not able to share any numbers at this stage. But directionally, I think we are not really -- in terms of -- in the context of the CapEx that we spend in India, the numbers are not going to be very, very big, right? So the initial years, 1 or 2 years, will have CapEx, which will moderate from the overall India perspective. And second is, basically, even that CapEx and investment, we are actually anticipating largely debt-funded investments in Africa. So to that extent, I think the the India free cash flow, we really don't expect Africa business to impact that much. So as far as the distribution policy is concerned, I think that cash will still be available. And we will see how the Board decides going forward. But certainly, there is a complete mindset of a steady in progress of dividend going forward as well.

Next question is from the line of Bineet Banka from Nomura.

I have a couple of questions. So firstly, on the CapEx per tower, so if I divide the growth CapEx for this quarter with the number of tower had added, the number which I get is around INR 39 lakhs per tower. And according to my understanding, the standard CapEx per typical tower around INR 20 to INR 25 lakhs. So what explains the divergence in the numbers? And the second question is, do you have any sense of what percentage of [indiscernible] idea tenancies came to interest what it used to be historically?