Indus Towers sees upside on relief for Vi

A lifeline may finally be on the horizon for India's debt-laden telecom sector. Bharti Airtel's tower arm Indus Towers on Tuesday welcomed the Supreme Court's order permitting the government to reassess adjusted gross revenue (AGR) dues, a move that analysts say could ease its key customer Vodafone Idea's (Vi) burden and, by extension, improve its own risk outlook and valuation, and bolster the sector's overall prospects.

- Jatin Grover

Indus Towers MD and CEO Prachur Sah called the development "a good sign for the industry," while reiterating that decisions on dividend payouts remain scheduled for the March quarter. Many brokerages said the ruling could strengthen Vi's survival chances and narrow Indus Towers' valuation gap with global peers. "What has happened is a good development for the industry in general. We welcome that support. As and when the clarity comes, it will help us make the right decisions (on cash returns for shareholders)," Sah said in a post earnings call. "The board will consider and is committed to distribute the cash to the shareholders and the timing (for review) still remains end of the financial year in Q4."