Suyog Telematics Limited ($537259)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I welcome you to the Q4 and FY '26 Post Earnings Conference Call of Suyog Telematics Limited. Today on the call from the management team, we have with us Mr. Shivshankar Lature, Managing Director; Ms. Subhashita Lature, Whole-Time Director; Mr. Ajay Sharma, Chief Financial Officer; Mr. Tushar Shah, Business Head, India; and Mr. Suyash Lature, Business Development Manager. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, this is a reminder that this call is being recorded. I would now request the management to detail us about the business performance highlights for the period ended March 2026, the growth perspective and the vision for the coming years, post which we will open the floor for Q&A. Over to the management team.

Good morning, everyone. I am Tushar from Suyog Telematics Limited. Entire presentation has been uploaded on both the exchanges. We right now will discuss the critical sites, which includes financials and the way forward. I am not running through entire presentation unless someone wants it, if there is any new investors for the call. Otherwise, we will only go through the critical sites, so we have more time for Q&A. [Foreign Language] So currently, we work with all the 4 mobile operators. My 48% of revenue came from Bharti Airtel Limited, 22.8% came from Jio, Vi was 26.7% and 2.5% of revenue came from BSNL. As you all know, we work on all the 26 states and UT. We have 6,008 [indiscernible] towers in the network, which has been occupied by 7,318 tenancies. Out of 7,318 tenancies, we have 4,000-plus small cell, which also includes 1,000-plus government sites. Around 6,300 kilometers of fiber -- aerial fiber network we have across India. And then around 189 sites, which are ready for integration and needs to be occupied by various operators. So going forward, we all know Vodafone has got a big relief in terms of spectrum charges from the government in the verge of declaring -- they have already declared 45,000 towers in next 3 years, which has again been revised to 50,000 to 70,000 towers in next 18 months. We are expecting a huge business from Vodafone in current -- in coming financial year, which is FY '27. Already we have -- we are speaking with BSNL, they are declaring some 10,000 sites -- [indiscernible] OpEx sites in current year and 20,000 CapEx sites, but which we can confirm only once we get the BSNL order in hand. So around INR 70,000 crore project has been marked by government in FY '27 for telecom sector. As you know, we work in all the -- we have urban sites, we have rural sites. We are also doing FTTH wherever required by operator. We are having a very huge presence of fiber. We are one of the -- we are only one of the few IP companies who also use fiber [indiscernible] along with tower. And we have last year acquired Lotus Tele Infra, and we are working on a new acquisition if any possibility comes in our way. So I want to brief you details about Vodafone because we'll be banking a lot on Vodafone in current financial year. So Vodafone has already got [indiscernible] relief, and their liability has been restricted to INR 64,000 crores. They have got a huge moratorium period, which will improve their cash profits and which will be used for CapEx. Vodafone is already working with major -- some [indiscernible] SBI consortium is working to lend them INR 25,000 crores, and there is another INR 45,000 crore investment expected soon, which -- due to which Vodafone management has -- and you all know that Mr. Birla is now again back on Vodafone Board because of all this development. Vodafone has already declared deployment of 60,000 to 70,000 new towers in the next 12 to 18 months. We are expecting around 5,000 towers from Vodafone in current financial year to be [indiscernible] required. And a big bulk order is on our way, should reach us by June end. So most likely, we will be able to get a big chunk of business from Vodafone by June end. As I said, BSNL is also working on rolling out around 30,000 sites in current financial year, but we are not very sure when we'll get a final order from BSNL. There are some issues with the Tejas Network in BSNL. BSNL network are not getting stable. There are some SIM-related issue where second type of SIM is not able to be [indiscernible] network, and there are also some micro connectivity issue where their backhauling is not getting stable. So unless their Tejas Network gets stable, we don't expect any new orders from BSNL right now. But as soon as their network-related issues with Tejas are resolved, we can expect good orders from BSNL. As you know, we have long-term [indiscernible] MSA with BSNL [indiscernible] within 15 years lock-in period. Our growth drivers will again be metro sites across India, which includes most probably 40-meter [indiscernible] towers and the [indiscernible] sites for metro city like Mumbai, Delhi, Pune. We are -- fiber is one of our biggest USP, where we are the only one of the few IP players who provides the aerial fiber connectivity, which is the backbone of any 5G network or 6G network coming -- going on. So fiber is one of our biggest USP, and we are going good on fiber network rollout across India. These are -- I am sure you must have seen our results by now. So we have locked the revenue from operations to INR [indiscernible] 2,219 crores with EBITDA of INR 1,642 million, which is at the -- and again, we have sustained EBITDA margin. We have improved on EBITDA margin with 74% EBITDA. Our [indiscernible] is INR 33 million, and the net profit is INR 631 million. Profit before tax was INR 833 million with PAT of INR 631 million. Again, we have a strong PAT margin of approximately 30%, which we are sustaining year-on-year. Our revenue from tower has improved in last financial year, which has gone down more than INR 29,000 because of massive rollout of BSNL in last financial year. So FY '26 has shown a good growth in revenue per tower, which has reached INR 31,000, and we are sure we'll sustain INR 31,000, INR 32,000 revenue per tower even in coming financial year. I'm sure you must have gone through all these financials, so I'll not waste time on saying all the numbers. So that's it from my side. Kamlesh, we can open it for Q&A now.

[Operator Instructions] We will take the first question from the line of [ Darshil Pandya ].

Sir, my question is since we are expecting towers -- tower orders from Vodafone as well and from BSNL now, how are we gearing up for this in terms of taking this capacity? Because I remember that in last call, you said around 2,500, 3,000 towers that we will not have an issue. But then after that, we will need some debt also, and then -- just wanted your views on that.

So [ Darshil ] right now, we are still awaiting final numbers from Vodafone. So as I said, even if they give us 5,000 order, we don't need to roll out 5,000 in 1 month. We'll have to roll out that 5,000 sites throughout the year as per the material availability. So as of now, we have not finalized any concrete plan. So as soon as we get a final order -- bulk order from Vodafone, we'll finalize the fundraising plan or whether we want to do it from internal accruals. And as and when the right time comes, we'll come back to you with the final plans [indiscernible] of this.

Okay. Understood. And sir, what were we planning for Q4 tower additions last quarter? I guess, we have added around 106 or 108 towers in this quarter.

Right. 106 towers, right?

Correct, right. And this year, what are the plans, sir?

So as I said, we're expecting around 5,000 orders from Vodafone. So if we get that orders in the month of June or maybe July, we'll deploy all the 5,000 sites in current financial year.

Okay. And from BSNL or Airtel, are we expecting anything?

See, Airtel and Jio has not declared any rollout right now. So they are working on their rollout numbers, and they have already invested a huge amount in 5G. I don't see any major -- and Jio is coming up with the IPO as all you know. So on this, we [indiscernible] Airtel and Jio, there's no point declaring the numbers of Airtel, Jio. As far as BSNL goes, we have heard that they are coming up with a 30,000-site rollout plan. But again, they are facing major issue with the Tejas equipment. So once it gets resolved, then only we will declare BSL numbers to you.

Understood. And Q1 will be somewhat similar to what [indiscernible]?

Q1 will sustain the Q4 number. There will be no major growth because even if I get orders by end of June, everything will be deployed in Q2. So Q1 will be similar to Q4 of last year.

We'll take the next question from the line of [ Mike Kalati ].

Sir, just wanted to understand, you mentioned that there is a delay in the BSNL order because of the issues with the Tejas equipment. So can you give some specific time line by when can this problem be solved and we can get the order, any rough time line?

See, Mike, we are nowhere involved in this entire transaction of Tejas to BSNL. So we can't commit any time line because we [indiscernible]. See, we don't speak with Tejas. Tejas are direct partners of BSNL. We are nowhere connected. So we are also waiting to hear from BSNL management. And as of now, we have not got any confirmation from BSNL management about the same.

Okay. And sir, we have been mentioning that we have done some massive rollout from BSNL in the last 1.5 years. But in terms of revenue, it's just 2.5% of the revenues come from BSNL. So can you please explain why is there a difference in terms of revenue...

So when even Government of India has given them INR 27,000-odd crores to roll out sites, they are very keen to roll out sites majorly in Mumbai, Delhi and other parts of India. But they really don't want to go ahead with the rollout unless these equipment issues are resolved. So as soon as equipment issues of Tejas are resolved, they will come up with a massive rollout. As you know, it's an indigenous network. It's an -- BSNL is using Tejas, which is an indigenous network. So it's taking time for resolution of the equipments.

No, sir, I was asking about the past. So you've mentioned that we have done both rollouts for BSNL in the last 2 years. But in terms of revenue, it's just 2.5%, so...

[indiscernible] Actually right. So, Mike, we have done almost 1,800 sites for BSNL in the last 2 years, out of which 189 site billing is still pending. But if you see BSNL rentals are very low. Like if I pay a rent of, say, around INR 15,000, INR 20,000, INR 25,000 for private operator, I pay highest rent for BSNL INR 7,000. That's why you don't see that same similar hike in top line when I do rollout for -- that's why you must have seen a dip in per site tower revenue. It went to INR 29,000 when I did BSNL rollout because there were rental capping. So whenever I roll out site rental, which is a pass-through amount, it's much lower for BSNL compared to private operator. While my PAT percentage remains same, but my top line gets down because of the lower rentals.

Okay. So this can go up to 4%, 5% of the revenue going forward or this will [indiscernible] stay...

In current financial year, which is FY '27, we are already -- as of now, we are very sure of Vodafone rollout. So Vodafone rollout will improve our top line and PAT, everything. So if we do BSNL numbers, we will have to see how much number we are doing for BSNL, but obviously, it will not have any impact on PAT or EBITDA. Top line revenue per tower can decrease slightly if we do BSNL rollout, which can go down by INR 1,000 to INR 2,000.

Okay. And lastly, in terms of the BNSL -- Vi order, which we are expecting of 5,000 towers, have we bidded for the same? Are we L1...

So we don't need to -- for Vodafone, there is no bidding or tender process. We have a master service agreement pan-India with Vodafone. So as and when they finalize, we have a few meetings with the top guys of Vodafone planning head and the management of Vodafone. They have, as of now, verbally assured us of a big rollout. And they will directly allocate us these sites as per -- if there are some sharing available in our existing site, they will 100% go for it or else they will allocate us the anchor sites. So there's no bidding process required for Vi.

Understood. So in all likelihood, Vi is more or less confirmed. It's just the quantum and the timeline is pending.

Even Vodafone wants to go with only top 2 or 3 rollout. Top 2 or 3 IP companies. One is Indus, which will have a major chunk of business, followed by -- most likely followed by Suyog, and then, there will be 2, 3 more IPs.

We'll take the next question from [ Varun Gaya ].

So my first question is regarding Vodafone only. Is there a time line or something because we were expecting orders in February, March? So now it's already delayed to June, and...

So Varun, as you're also aware that Vodafone news just came last month about the spectrum relief. No lender was ready to fund them unless there was a credit on spectrum charges, which they have got the last month. So now, Vodafone is very sure that they will be able to raise funds by June end, and they will raise all the orders by June end. So that's why Mr. Birla is again on Board. They have already declared rollout. But as like what you hear from news channels, we are [indiscernible] directly from Vodafone. So we are dependent on Vodafone. More or less, as of now, communication is that by June end, we'll get -- the rollout will start in full pace. So that's what...

But our numbers will -- you'll do CapEx, and our numbers will come in Q3 onwards, right? And if we get the Q2...

[indiscernible] See, if we get by June, our numbers will start coming from Q2 onwards only. But yes, Q2 will not be very high because it will also -- the rainy season will also impact us in Q2. So major numbers will come in Q3, Q4.

Okay. And secondly, our revenue in last 4 quarters have been flattish despite we doing some 100, 150, 200 tower additions. There has been no jump in revenues or anything.

No, I don't think. So if [indiscernible] last quarter number -- compared to last year, we have seen almost 18% growth in our revenue. And with a small rollout like 100 per quarter, 18% is good enough because we're also able to do some upgrade business with Bharti Airtel. That's why Airtel is sustaining on 48% revenue. So we've done almost 18% growth because there was no major rollout for any IP company across the industry.

Okay. And BSNL, so we are not factoring any orders from BSNL this year?

See, we are aware that it will come through, but there's no point declaring unless we have some -- like from Vodafone, we have a communication that by June end, they want to release the order. As of now, we have not got any confirmed deadline from BSNL. So as of now, we are not factoring anything from BSNL.

And your full year target, you mentioned last year that you will achieve around 12,000 tenancies. So is it -- will that be achievable this year, or again, there will be some delay?

So, see, right now, we are working on 5,000 tenancies, which Vodafone is discussing with us. So as and when BSNL gives us some confirmed deadline, we will reach [indiscernible] our targets by -- whenever we have Q1 con call, we can have a final target for FY '27. By Q1, we should have a clarity on Vodafone and BSNL.

Understood. One bookkeeping question. This loan in current assets, it's jumped from INR 7 crores to INR 34 crores. Is it some advances? Or what is that, if you could explain? Is it given to some subsidiary or...

It's -- see, there is no -- we have not taken any new loans. It's because of loans and advances to the other [indiscernible].

Pardon.

It's because of loans and advances.

Yes. But what is it? Given to subsidiary or whom?

Subsidiary.

Subsidiary for this CapEx related to towers?

Yes.

We'll take the next question from the line of [ Rohan Choksi ].

Sir, just wanted to understand, is it 5,000 towers or 5,000 tenancies from Vodafone?

5,000 tenancies. Now, [indiscernible] maximum would be anchor site. So we are not expecting major sharing sites. So you can say around 4,000 towers and 5,000 tenancies. That's what is an ideal combination. But finally, we'll come to know exact numbers only when they load us the site by [indiscernible] dynamic.

Got it, sir. And sir, can you throw some light on what -- how is the process like with Vodafone? Because you said by June, they will -- is it by tendering? Or do we get the orders straight away? And what kind of towers are these that we will be placing and the CapEx for it?

So Rohan, we get the order directly since we have master service agreement with Vodafone. They don't do any tender. They directly allocate tower to all the IPs who has a master service agreements with them. In terms of type of tower, maximum tower what we are expecting would be ground-based tower, 40 meters, which will require CapEx of INR 12,00,000 to INR 15,00,000 CapEx per tower. Metro cities will have RTT of 12-meter, 18 meters RTT, but all rural sites will be almost 40-meter GBT sites.

Okay, sir. Got it. And what is the time line for us to place on these towers by?

See, the entire rollout of 70,000 -- 50,000 to 70,000 sites are planned for this financial year. So whatever orders...

5,000. Sir, not 50,000. 5,000.

5,000 towers, which will come to us. We will have to deploy it in FY '27 only for us to complete all the rollout by FY '27.

Got it, sir. So FY '27 seems like another flattish year compared to '26. Would that be right to say?

If we do roll out 5,000-tower, yes, the entire year benefit we will get in FY '28. But at least, we will have a base ready where from Q1 of FY '28, we'll get the full benefit of the rollout site of FY '27.

Got it, sir. And sir, just last one question, sir. Can you like help us understand, sir, what -- how is BSNL being held up by Tejas network? So what exactly is the bottleneck here or that is stopping us from doing more towers for them? Because if the government is so aggressive, then why is Tejas not.

Again, we are nowhere connected with Tejas. We also hear something from BSNL employees. We don't have any details of it. But whatever information we have is that BSNL is using Tejas, which is indigenous network. It is not a Nokia or Ericsson, which have been imported. And they are currently facing challenging in backhauling of these sites, along with [indiscernible] on the network. So they have some 2 types of SIM cards. One type of SIM card, they're able to latch on the network. Second type of SIM card is still not able to latch on any 4G network of BSNL. So they are working on the same to resolve it. Other than that, we also don't have any details about it.

We'll take the next question from [ Ashwita Shetty ].

I wanted to ask a question about Indus Towers has been increasingly using renewable energy, solar solutions and green energy open access arrangements to reduce dependence on diesel generators and grid power. So is Suyog evaluating similar initiatives? Because the company is scaling its tower portfolio significantly over the next few years. So what potential impact could this have on operating costs in INR and margins over the next few years?

So, [ Ashwita ], we are ahead of Indus. We don't have any -- we have only 2 [indiscernible] DG sites in our network. All my sites are EV connected on grid. So first thing, we don't get any major sense because we don't use diesel. We use only mobile DGs during monsoon season where there is a major power outage. Otherwise, we don't have any dedicated DG. As far as solar energy goes, we don't have -- we are not using -- we are not going ahead with solar plants right now because ROI is very high for solar. See, we only need 5-kilowatt power or maximum 10 kilowatt per site. And so we have tried multiple times deploying solar, but we are not getting ROI since all my sites are major in metros and with a very high [indiscernible] EV availability. Third point is battery, and we are using -- we have moved from VRLA to lithium battery a year back. So now, we are not using VRLA battery. We are using lithium battery. But in terms of renewable energy, we don't need. We don't have any DG site. All my sites are connected on power, the grid.

Okay. Another question was that management previously indicated that revenue per tower improved partly due to billing commencement on previously unbilled BSNL sites and Airtel upgrades. Could you quantify how much of this quarter's revenue growth came from activation of old BSNL sites, Airtel upgrades and genuinely new tower or tenancy additions, respectively?

Well, the major revenue came from the upgrades of Airtel. We were able to do around 120-odd sites for BSNL billing, which we added in current quarter. So in terms of percentage, if you see, around 0.5% would be because of BSNL billing, which started for around 120, 125 sites. Balance all came majorly from Airtel upgrades and Vodafone new rollout.

Okay. Just this last question. In the last con call, you guided for around 1,000 Vodafone towers per quarter starting from quarter 1 FY '27. Could you help us understand how much of that rollout has actually materialized till date and whether the original Vodafone rollout plan remains intact or has been revised?

So, as of now, Vodafone rollout remains intact. Only difference would be that instead of Q1, major number will start flowing from Q2. Actually, even Q2 being rainy season, we don't expect very high rollout in Q2, but yes, Q3, Q4 would be bumper for Vodafone rollout. Overall, on an annualized basis, Vodafone rollout remains intact of 5,000 sites. Only thing there can be some shift from Q1 to Q2, Q3, Q4.

We'll take the next question from the line of [ Darshil Pandya ].

Tushar, sir, just to know what has been our average realization per tower this year or this quarter?

INR 31,000. I've just shown in one of my slides, it's INR 31,080 we have reached at end of the financial FY '26. We were able to improve our revenue per tower from INR 29,000 to INR 31,000.

Okay. And this year, we are expecting a similar number or any increase in this INR 31,000 number?

[indiscernible] numbers. Revenue per tower would remain between INR 31,000 to INR 32,000.

Okay. And sir, any -- something on borrowings, what are we planning? This year, what borrowings are we planning to have?

Can you again repeat? I just missed you.

What debt are we planning to keep on the books this year?

As of now, we have not done any financial planning because we are awaiting final numbers from Vodafone. And we have enough funds to roll out sites on our -- 3,000 sites on our internal accruals plus available debt limit. And then, when we get final Vodafone number, we can raise the financial plan of fundraising or debt raising. And then, we'll come back to you by end of Q1 or whenever we have a quarterly call -- next quarterly call, we can declare at that point of time.

We'll take the next question from [ Puneet Singh ].

So we are planning to add 5,000 towers in FY '27, right? So what would be the CapEx per tower? And can you give a breakdown, as in, in which quarter, how many towers can we expect?

So see, as of now, CapEx per tower right now, it seems it will be around INR 12,00,000 per tower because more or less, we'll have a 40-meter GPT. So CapEx per tower will be INR 12,00,000. And in terms of rollout, we are seeing major rollout -- Q2 should be around major -- maximum rollout will come in Q3 and Q4. It will start from Q2, and major rollout will happen in Q3 and Q4. Exact numbers, we are awaiting Vodafone details. [indiscernible] my entire rollout plan depends on Vodafone [indiscernible] plan. So once we get the Vodafone requirement, we'll share exact plans with you in next quarterly call.

Got it. So it's total CapEx of INR 600 crores, right?

Yes.

So you're saying that we would be doing most of it from -- I mean, how much of it would be from debt and internal accruals?

Around 50% we'll be able to do from internal accruals plus existing debt limit and everything. For balance 50%, we will work out. As and when we get the final numbers from Vodafone, we freeze our actual CapEx amount. At that time, we will work out the other balance, and we'll let you know.

Got it. And what is the depreciation per year for a tower? I mean, how much is the straight-line depreciation for that?

It's 18% -- 18 years depreciation [indiscernible] .

Got it. So I want to understand that what are the realizations for a 5G tower versus 4G, 3G tower?

See, for me, it does not matter much because for me it's a tower, like 2G, 3G, 4G are all relating to operator. But where we benefit is from the upgrades. So we almost get around INR 3,000, INR 3,500 per upgrade. So any additional technology gives us additional revenue of INR 3,000 to INR 4,000.

Got it. So for FY '27 -- I mean, in FY '26, we added just 300 towers, right?

Yes, close to 300 towers.

So FY '27 revenues and top line, bottom line, I mean, what can we expect realistically?

See, because most of my rollout will come from FY '23 -- in Q3 and Q4, so most likely, growth will remain same as current year growth, will be 15%, 20%, but entire year benefit we will get in FY '28.

Got it. And by when do we expect to draw down this debt Q3, Q4 onwards itself?

Yes. So anything can be finalized on financial only when we get the Vodafone -- suppose Vodafone wants to complete everything by Q3, and our plan will change again. So it depends on Vodafone numbers. So you have to give us 1 quarter time. So in next quarter call, we'll have a detailed plan for the finances.

Got it. But this 5,000 that has been confirmed by Vodafone, but it's just about...

As of now, yes. As of now, they have confirmed us that they will give 5,000 sites to Suyog. That's what we are -- actually, they want to give more, but we had demanded 5,000 based on our financials available. So lets wait up to June end, where we get the confirmed official orders from Vodafone.

Got it. And -- okay, so they have confirmed basically that they will take this 5,000 towers on tenancy.

See, we have already officially declared 50,000 to 70,000 rollout in FY '27. [indiscernible] look in all the social media and net or you can see any newspapers, you will find they have already officially declared 50,000 to 70,000 rollout plan [indiscernible].

We'll take the next question from the line of [ Tanya Kalra ].

Sir, my first question is that interest costs have risen significantly despite strong operating cash generation. So why are these costs growing faster than operating earnings? And what is the management's target debt level over the next 2 years?

[Foreign Language].

Okay, sir. So -- and you had acquired Lotus Tele Infra, so what is the status of growth in that business? And in the Northern region, what are the developments?

[Foreign Language].

Okay. And, sir, one more question. Q4 EBITDA margins have expanded dramatically despite kind of flattish growth in the revenue. So can you explain...

[Foreign Language].

We'll take a follow-up question from [ Ashwita Shetty ].

I wanted to ask that, as you said earlier, you are looking for acquisitions. So I just wanted to understand what approximately would be the size of it? And how do you plan to fund it?

See, in terms of size, it will vary from company to company. As of now, we have not finalized anything. So it depends on the number of towers that company has. So we can't tell you exact size right now until we finalize something. Funding, as of now, say, if it comes immediately, then it will be through internal accruals because we don't go for a very big company. We normally go for a smaller IP companies, for which we don't need to raise any funding. More likely, we'll do our acquisition from internal accruals.

We'll take the next question from [ Ajay Rana ].

Previously, the management had indicated that the data center...

You are not audible.

Am I audible right now?

Yes.

Yes. So previously, the management had indicated that the data center business would emerge as a new growth avenue, expected to be materialized by quarter 4. So could you please provide an update on the progress made in this segment?

So as of now, there's no much progress in data center business because we are working with multiple telecom operators. Right now, everyone is focused -- see, Jio stopped entire CapEx investment until the IPO. Airtel is not doing any major CapEx. Vodafone is surely that they want to just roll out towers right now. So as of now, no movement on data center business. But yes, we are very hopeful it will come down in future coming few years. And we have -- we are ready. Whenever it comes to us, we'll grab the opportunity.

Got it. And one more thing I wanted to ask is that in the auditor's report, they have emphasized on strengthening the internal controls framework of the company. So could you please elaborate what specific measures management would have undertaken to comply with this same?

Ajay, so see, when we say strengthen, see, we are planning to almost double our site count. Right now, we have around 7,000 sites, where we are adding -- we are trying to add another 5,000 sites. So based on the volume, auditor has committed that we need to improve our internal controls so that whatever payment is happening or billing -- the automation of billing, automation of warehouses, so we are deploying many softwares for billing purpose, for rental payment, for warehouse [indiscernible] management. So that all we are doing -- whatever auditor is suggesting, we are going ahead with the same, and we are ensuring that we fulfill all the auditor's requirement in terms of strengthening internal control. We will not leave any stone unturned over there. We are -- as a company, we are very clear we want to have the best internal controls in the company.

We'll take the next question from the line of [ Puneet Singh ].

So what should be the exit tenancies in FY '27?

So as of now, we feel it should be somewhere around 12,000 to 13,000, 7,000 tenancies and 5,000 [indiscernible] let, but everything is subject to Vodafone rollout. So if we get Vodafone rollout of 5,000, you can add 5,000 in the tenancies. So we can clarify in the Q1 end only.

Got it. So in the last con call, you mentioned that FY '27 exit tenancies would be around 17,000.

Right.

And total tower count would be around 13,000, 14,000. So I mean within 1 quarter, what went wrong that...

So nothing has went wrong. With what right now I'm calculating, it's only based on the Vodafone feedback to us. We are still awaiting BSNL confirmation. If BSNL confirm us that their issues have been resolved and they want to roll out site, then again, target remains the same. [indiscernible] we get final confirmation from BSNL, we're not considering any BSNL rollout right now.

Got it. So basically -- I mean, what kind of communication did you have with BSNL? And what -- I mean, what is stopping them from the rollout? And in case they go ahead, do we have the capabilities to add those towers also on top of Vodafone?

As you know, we have always planned like 10,000, 12,000 new tower rollout in a year. And in terms of execution capacity, we are capable of executing any numbers on ground. What communications we have got from BSNL is that they want to roll out around 30,000 sites in the current financial year, but they'll start to roll out only after Tejas issues have been resolved. And as of now, we don't have any clarity on time lines by when they will start. And in terms of finances, as I said, as and when we get the orders, we'll be making our financial plans, and we'll ensure that we don't have any shortage of funds either way, whether it's debt, whether it's internal accruals, whether it's fundraising. But if we get the business, we'll grab it from both the hands, and we [indiscernible] all the towers.

Got it. And what about the other segments, like you mentioned CCTV, fiber project? So how are they going about?

So fiber goes along with the tower roll. As and when we roll out tower, the operator needs fiber for network connectivity, which grows along with the tower growth. CCTV was one kind of an acquisition tactics where we tried to acquire sites which are not doable, which will continue as and when as per the requirement.

Got it. So -- I mean, currently, what I understand is fiber is -- we are procuring -- I mean, we are not the ones who is procuring fiber and billing the customer. So -- I mean, fiber is basically sort of a backward integration you're saying?

Yes. Right. So fiber will be deployed along the tower. It's a last mile connectivity.

Got it. So currently, we are procuring it from outside, but what you're saying is that going forward, we will -- I mean, can you help me understand what is the model here? And is the customer built for the fiber?

Can you repeat? I was not able to hear you completely.

So basically, we are the ones who put up the towers and we get paid the monthly rental. In this, we have to incur the entire cost of setting up the tower and also the fiber and the wire material used. Is that a fair understanding?

[indiscernible], it's the same model for fiber also. We purchase fiber from the manufacturer. It's our asset. We rate and we service it to operator. Model is the same, whether it's tower or fiber, we only do [indiscernible] IP business, which is a recurring model.

Got it. So currently, I mean, in our projects, is the fiber directly procured by our clients?

No, no, we procure fiber. Clients don't procure any fiber. We procure fiber. We [indiscernible] it, and we sublease it to them.

Okay. So we bill it to the client, and it is on top of the INR 12,00,000 -- I mean -- so how does this model work? I mean, how does this model work? I want to understand. You mentioned about this fiber-driven project. So in the past also, we were doing the same, right? So what's new? And why is this something -- why is it in a different segment? It's clubbed in...

So, [indiscernible], when we say we have 3, 4 growth engines, right? One is our mobile tower rollout, which we do very aggressively. Second, along with tower, we also deploy new fiber. Billing happens separately for fiber. So there is an [indiscernible] element of billing -- fiber in our billing. So one is our last mile connectivity for operator in terms of fiber. Third, we also go for many other fiber when it's not our fiber, it's some other IP site, but operator wants [indiscernible] them to be connect that side also on fiber, which is again on a recurring model basis where they pay me monthly.

Got it. So you're saying that, I mean, previously, our clients get this fiber work done from some other party, but we are trying to take this work as well.

No, not other party, they used to roll out their own fiber. Now, they're not very keen on laying out their own fiber. So they're outsourcing it like a tower to [indiscernible] IP companies.

Got it. So what kind of an opportunity is this? And -- I mean, what kind of revenues can we expect from this in FY '27? What are the margins?

Now, FY '27 will be very minute. As and when we roll out site, it would not be even 2%, 3% of my revenue. But once the rollout are complete, and they focus on quality of network, fiber rollout will come in a big way. That's the time when we'll be able to grab revenue opportunity for fiber revenue. So fiber revenue actually will get materialized in, say, FY '28, FY '29, where operators are looking for quality of network and not the massive rollout.

Got it. And generally, how long does it take to erect, say, 1 tower? And what are the complexities involved? How are the conversations with the -- say, the landlord...

[indiscernible], in terms of [indiscernible] for ground-based tower billing [indiscernible] around 45 to 60 days to roll out for ground-based tower. And for RTT tower, we need around 21 to 30 days for 1 rollout. In terms of landlord, we have long-term agreements with them for 10 years. We normally go for 10 years agreement with the landlord so that there is a continuity in the tower.

Got it. So for example, if we are charging INR 32,000 per month, how much on average is the rent per tower that we pay?

Almost if you see, metro city, we will have -- where there are more or less RTT site, we have a rental of around INR 20,000 per month to landlord. And for ground-based tower in rural area, it will be INR 7,000 to INR 10,000 per month. And the entire thing is reimbursed by the operator. We don't pay any rent from our pocket. We'll get reimbursement from operator.

Okay. Got it. So that is not our cost basically?

No, that's not our cost.

And the conversation to put up the tower, is that something we do? Or is that already done by the operator?

[indiscernible].

The conversation with the landlord to...

We sign the agreement. It's not done by a customer. We sign the agreement if they want Suyog Telematics.

Got it. So basically, you have to sign agreement with 5,000 landlords to erect 5,000 towers.

Yes. In terms of Suyog [indiscernible] site acquisition up to site RFI for all the passive equipments, it's Suyog [indiscernible].

Got it. Got it. And what are the gross margins per tower?

85%.

85%.

[Operator Instructions] So I think that was the last question for the day. Would the management like to give any closing comment before we end this conference call?

So closing comment is only one that we want to add in this quarter that -- for [indiscernible] billing, we want to add in the top line because then [indiscernible] compliance of account we have to take in the top line. So we will add in this quarter. And accordingly, we will finalize our account. That's one issue. Second issue, we want to tell you we are very confident about our rollout by BSNL and by Vodafone. And we have already acquired. We are focusing on 10 states to complete our rollout with a strong manner because our already sites are in Maharashtra, Uttar Pradesh is a major rollout, and we another want to start Bihar also. This is the best opportunity for Suyog to work out. I thank you very much for their valuable input to us and be connected with us. Thank you very much.

Thank you. Thank you to the management team for giving us the time. Thank you to all the participants for joining us on this call today. This brings us to the end of today's conference call. You may all disconnect now. Thank you.

Thank you, everyone.