Indus Towers reported a Rs708 crore net loss in the third quarter of the current financial year, compared to a Rs1,571 crore net profit the previous year, after being forced to make a sizable Rs2,298.10 crore provision for doubtful debt in the October-December period after a key customer, believed to be Vodafone Idea, warned of potential difficulties in meeting future payment commitments.
As a result, India's largest telecom tower company has implemented a strict policy for calculating a doubtful debt allowance on overdue receivables. The additional provision for the doubtful debt of Rs2,298.10 crore in the December quarter represents a nearly 30% increase sequentially. In the second quarter, the tower company set aside Rs1,770.90 crore for doubtful debt.
Indus' consolidated revenue for the October-December period was Rs6,765 crore, down 2% year on year, while consolidated earnings before interest, tax, depreciation, and amortization (EBITDA) fell 68% year on year to Rs1,186 crore, owing to Vi's ongoing difficulties in meeting its obligations. The December quarter's free cash flow was a negative Rs621 crore.
Following this development, Indus Towers was trading 2.26% lower at Rs166.60, against the previous close of Rs170.45 on NSE. The counter opened at Rs164.20, which is also its intraday low so far.
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