Metrics cut 1
- FY27 tenancy target cut to ~10,500 (from 12,000 last quarter)
Event Participants
Executives (1)
Shivshankar Lature, Managing Director
Analysts (8)
Anubhav Jain, Divyansh Thakur, Guneet Singh, Mahek Talati (Agility Advisors), Rakesh, Saket Kapoor, Surbhi Mishra, Varun Ghia (Equitree Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹71.0 crores | +6.1% QoQ vs ₹68.5 crores; +6.3% YoY vs ₹66.8 crores (Q1 FY26). Growth was muted as Vodafone orders only began mid-June; includes electricity reimbursement due to new accounting policy from April 1 |
| EBITDA | ₹42.0 crores | Maintained at 59.3% margin including electricity in topline (policy change effective Q1 FY27). Previously ~70% margin excl. electricity; comparable to ₹41.8 crores last quarter |
| PBT | ₹19.5 crores | Stable vs prior quarter; PAT margin constant at 20% with electricity cost included |
| Net Profit | ₹14.5 crores | Margin maintained at ~20% (excluding one-time VI reversal in year-ago quarter that had inflated PAT to 25%) |
| EPS | ₹12.37 | Reported for Q1 FY27 |
| Revenue per Tower | ₹31,000/month | Excluding electricity (would be ~₹50,000-55,000 with electricity); constant at ₹31,000-31,500 for last 4 quarters |
| Tenancy Ratio | 1.2x | 6,103 towers with 7,468 tenancies; targeting 1.8x in 3 quarters based on macro-site mix |
| Sites / Tenancies | 6,103 towers / 7,468 tenancies | 95 new towers = 150 tenancies added in June; 700+ tenancies in hand for conversion |
| Client Revenue Mix | Actel 48.1%, BI 27%, Geo 22.6%, BSN 2.3% | Actel share +1%, BI +2% during quarter |
Geographic & Segment Commentary
Vodafone Idea (VI) Rollout: Received bulk orders from mid-June 2026. Executed ~95 towers (150 tenancies) in 15 days from Udaipur region. Management confident of converting 700+ additional tenancies already in hand during Q2, with 3,000 total VI tenancies targeted for FY27 (conservative, 10% of VI's planned 30,000 site rollout).
BSNL: 186 sites with billing pending (~₹100 crore receivable implied from "1,000% to 186% reduction" in pending billing). No new additions this quarter as BSNL resolves Tejas equipment issues. Management optimistic but not committing numbers until billing confirmation received. BSNL announced ₹77,000 crore capex for 2 lakh sites over 5 years.
Fiber Business: Fiber revenue currently 5-8% of total revenue; no major jump expected in FY27 as VI sites are microwave-based (VI lacks strong fiber network vs Jio/Airtel). Fiber generates ~70% EBITDA margin (same as tower model excl. electricity).
Other Operators: Airtel and Jio not doing major rollouts currently; momentum entirely from Vodafone Idea and potential BSNL recovery.
Company-Specific & Strategic Commentary
Zinc Battery Launch: Company to be first IP-1 to launch zinc batteries (from GBB Batteries, Kerala plant; promoter is ex-Apple battery head). 100% made in India, fire-resistant, and priced at ~₹33,000 per 100Ah vs ₹48,000 for lithium (which rose ~50% in 2-3 months due to China subsidy removal and rupee depreciation). First batch for 10-15 sites expected by mid-September. Capex saving is the major benefit.
CapEx and Funding: 80:20 ratio between new towers and co-located tenancies expected. Each site requires 3 batteries (100Ah-900Ah range). Management has no immediate fundraise plan for 3,000 tenancy target, but will revisit if order flow exceeds expectations.
Vodafone MSA Framework: 15-year master service agreements are blanket frameworks (not minimum revenue commitments); VI loads sites based on their funding availability. No operator MSA guarantees minimum volumes.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| VI Tenancies (FY27) | 3,000 (conservative) | Based on VI's 12,000 sites rollout by Sep-Oct and ~30,000 for FY; could increase if VI secures additional ₹25,000-30,000 crore funding from SBI/consortium (in final stages, as confirmed by Abhijit Kishore) |
| VI Tenancies (FY28) | 5,000 | Based on VI's 45,000 site rollout over 18-24 months; reflects execution capacity, funding visibility |
| EBITDA Margin (FY27) | ~59% maintained | With electricity in topline; margin excl. electricity ~70% |
| PAT Margin (FY27) | ~20% | Sustained with electricity in topline; adjusted for one-time items |
| Tenancy Ratio | 1.8x by end-FY28/early FY29 | Driven by macro-site mix; Q1 rollout ratio was 1.8 (150 tenancies/95 towers) |
| Revenue per Tower | ₹31,000/month (excl. electricity) | Expected constant for new VI sites |
| Rollout Seasonality | 35-40% H1, 60% H2 | Rain impact on Q2; spillover absorbed in Q3/Q4 |
Risks & Constraints
| Risk | Context |
|---|---|
| Vodafone Idea funding dependence | VI has secured only ₹6,400 crore of planned ₹45,000 crore. MSAs are frameworks without minimum volume commitments — VI loads sites based on funding. If SBI/consortium funding (₹25,000-30,000 crore) is delayed, 3,000 tenancy target is at risk. Mitigation: 700+ tenancies already in hand; management confident based on daily site loading and VI CTO satisfaction with performance. |
| BSNL rollout delays | Tejas equipment issues have stalled BSNL rollout for 1-1.5 years. 186 sites still have pending billing (reduced from ~1,000). BSNL's ₹77,000 crore/2 lakh site plan depends on equipment resolution. Management has deliberately not included BSNL in FY27 targets; recognition only after billing confirmation. |
| Lithium battery price inflation | Lithium battery prices rose ~50% in 2-3 months (₹33,500 → ₹48,000 per 100Ah) due to China subsidy removal and INR depreciation. If zinc battery launch is delayed beyond mid-September, capex per site increases materially. Zinc battery is fire-resistant, 100% India-made, priced at old lithium prices. |
| Customer concentration | Revenue mix concentrated: Actel 48.1% + VI 27% = 75%+ from two tenants. If VI's aggressive rollout slows, growth trajectory would be impacted. Management positioning: advance into BSNL (2.3% now) once billing starts. |
| Execution capability in rainy season | Q2 faces monsoon impact; management acknowledges rain effect but cites 150 tenancies achieved in 15 days during June (partially rainy) as evidence of execution capacity. |
Q&A Highlights
Zinc Battery (Guneet Singh)
- Question: Is zinc battery made in-house? What are revenue projections and cost savings?
- Answer: (Lature) Tie-up with manufacturer GBB Batteries (Kerala) — no in-house manufacturing. Promoter is ex-Apple battery head. Lithium cost now ₹48,000 per 100Ah vs zinc at ₹33,000 for 100Ah (3 batteries per site). Direct capex saving per site. No financial guidance, but 3,000 VI sites at ₹31,000/month excl. EB and ₹20,000-25,000 EB per site can be derived. Zinc is fire-resistant with same efficiency as lithium.
Vodafone Order Confidence (Mahek Talati)
- Question: Confidence level on getting 3,000 VI orders this year? What's the current order book?
- Answer: (Lature) Very confident — daily loading from VI; 150 tenancies executed in 15 days (mid-June) during rainy season. 700+ tenancies in current kitty (plus 150 done). Met Jagbir Singh (VI National CTO) and Gurukul Central team — happy with performance. Estimated 80% new towers, 20% shared tenancies. Recapitalization: VI secured ₹6,400 crore from SBI; awaiting additional funding from SBI and consortium.
BSNL Strategy (Mahek Talati)
- Question: Why the cautious stance on BSNL after targeting it for 7-8 months? When will orders materialize?
- Answer: (Lature) BSNL's 77,000 crore/2 lakh site plan is credible (CMD announced publicly). However, Tejas equipment issue is delaying rollout. Company has BSNL orders in hand but not executing until billing starts. Management doesn't want to commit numbers publicly and miss them due to operator issues. BSNL revenue contribution should be a clear path starting once equipment resolved.
Fundraise & FY27 Exit (Mahek Talati)
- Question: FY27 ending at ~10,500 tenancies? Funding requirements?
- Answer: (Lature) Yes — 7,000+ current + 3,000 VI tenancies = 10,000+ by FY27 end. Internal accruals sufficient for current target; no major fundraise planned, but will revisit if order flow exceeds expectations.
Balance Sheet & Margins (Divyansh Thakur)
- Question: What happened to the 12,000 tenancy guidance from last quarter?
- Answer: (Lature) 3,000 is a conservative target based on VI's secured funding. Company will increase target when VI announces confirmed 30,000 site rollout and gets SBI funding. Abhijit Kishore (VI CEO) stated final stages for additional funding. PAT margin ~20% constant (excluding one-time VI reversal that inflated last year's Q1 to 25%).
Tenancy Ratio Improvement (Surbhi Mishra)
- Question: What will drive tenancy ratio from 1.2x to 1.5-2x? Incremental EBITDA from existing towers?
- Answer: (Lature) Macro-site mix is key — Q1 rollout had 1.8 ratio (150 tenancies/95 towers). Targeting 1.8x ratio by FY29 early quarters. ROI improves dramatically with sharing: single tenancy = 3.5-4 year payback; two tenancy = 24 months; three tenancy = 18 months. EBITDA percentage improves with higher sharing ratio.
MSA Framework (Surbhi Mishra)
- Question: Does the 15-year Vodafone MSA guarantee minimum revenue?
- Answer: (Lature) All operator MSAs are frameworks with fixed commercials — no minimum volume guarantees. VI loads sites daily based on their funding availability. MSA is blanket — unlimited site capacity subject to execution capability.
VI Revenue Contribution (Surbhi Mishra)
- Question: What percentage of revenue will Vodafone contribute post-expansion?
- Answer: (Lature) Target is 30-32% of revenue from VI once 3,000+ sites are done.
Fiber Strategy (Rakesh)
- Question: What % of FY27 revenue from fiber? EBITDA margin comparison?
- Answer: (Lature) Fiber
5-8% of total revenue, no major jump this year as VI sites are microwave-based (VI lacks fiber network like Jio/Airtel). Same EBITDA margin as towers (70% excl. EB). Fiber is asset-heavy with recurring revenue from operators.
Reduced Tower Target (Varun Ghia)
- Question: Why cut guidance from 12,000 to 10,500 tenancies?
- Answer: (Lature) 3,000 is conservative basis on secured funding; when VI confirms additional funding from SBI, target will increase. Vodafone's planned rollout of 12,000 sites by September-October drives current commitment.
BSNL Pending Billing (Anubhav Jain)
- Question: Status of 189 BSNL sites with pending billing? When will they contribute?
- Answer: (Lature) Pending billing reduced from ~1,000 to 186. No new collections this quarter as BSNL resolves issues. News from few days back suggests issues getting in control — Q2 should see billing start on 186 sites.
Future Run Rate (Anubhav Jain)
- Question: What's the sustainable annual tower addition run rate beyond FY27?
- Answer: (Lature) FY27: 3,000 from VI; FY28: 5,000 from VI (10% of 45,000 program). Beyond FY28 too early to project — telecom industry is dynamic and operators change plans. No visibility beyond 2-year horizon.
Key Takeaway
Suyog Telematics delivered a stable Q1 FY27 with revenue of ₹71.0 crores (+6.1% QoQ), EBITDA at ₹42.0 crores (59.3% margin with electricity in topline post accounting policy change), and net profit of ₹14.5 crores. The quarter's headline was the commencement of Vodafone Idea's macro-site rollout—95 towers and 150 tenancies executed in just 15 days of June, with 700+ additional tenancies already in hand. Management has guided to a conservative 3,000 VI tenancies for FY27 (revenue contribution of ~₹31,000/tower/month excl. electricity), with 5,000 targeted in FY28 as VI's ₹45,000 crore rollout scales. The company is pioneering zinc battery adoption to counter a 50% spike in lithium battery costs, positioning for meaningful capex savings. Strategic watch points include BSNL's equipment-related delays (186 sites pending billing) and VI's ability to secure additional ₹25,000-30,000 crore in funding; management expects revenue acceleration from Q2-Q3 FY27, with full-year benefit visible in FY28.