New Delhi, May 19
Following healthy collections from customers along with receipt of overdue payments, credit rating agency ICRA on Monday revised the outlook on the Indian telecom tower industry to ‘Stable’ from ‘Negative.’
The industry was earlier facing headwinds owing to elongated receivables, on account of delays in payments by some of the telecom service providers.
However, the situation has improved materially with consistent timely payments to the tower companies resulting in reduction of receivable days to around 45-60 days, lower than the ICRA’s negative outlook threshold of 80 days.
This, coupled with recovery of the past overdues, has enhanced the liquidity profile of the telecom tower industry and moderated the reliance on external debt, which is likely to translate into improvement in the return metrics of the industry.
ICRA expects the tower industry to report an operating income growth of 4-6 per cent with operating margins (adjusting for energy revenues) at around 70-75 per cent for FY2026.
These along with easing of the working capital requirements is likely to boost the liquidity position with the cash balances of the industry increasing to around Rs. 5,500-6,000 crore from Rs. 2,200-3,000 crore levels in the past.