Indus Towers Ltd Management Discussions

Macroeconomic Trends:

Indian economy sustained its strong growth momentum in FY2025-26, recording an estimated GDP growth of 7.7% (provisional estimates), the highest in three years, driven by a dual engine of robust private consumption and continued capital investment. CPI inflation averaged a notably subdued 2.1% during 2025-26 which is well within the RBIs 2-6% target band, driven by a softening in food prices, which briefly entered deflationary territory in October 2025. This created space for a decisive shift to an accommodative monetary policy, with the RBI cutting the repo rate cumulatively by 125 basis points across four reductions, from 6.5% at the start of the year to 5.25% by December 2025, supporting credit growth and consumer demand. On the fiscal front, the Government maintained consolidation discipline, narrowing the fiscal deficit to 4.4% of GDP from 4.8% in FY25, while sustaining capital expenditure to drive infrastructure development.

The Governments budget for 2025-26 reaffirmed Indias infrastructure push with a capital outlay exceeding 11 trillion and a focus on digital connectivity. Key measures included expanding rural broadband under the BharatNet program and promoting public-private partnerships (PPP) in infrastructure projects. To catalyze digital infrastructure, the Government introduced incentives for data centers, a draft National Data Center Policy 2025 proposing 20-year tax holidays and GST input credits for developers, and a tax holiday until 2047 for foreign cloud service providers using Indian data centers, aimed at attracting global investment and bolstering Indias digital infrastructure. Additionally, ease of doing business reforms such as uniform national Right-of-Way (RoW) rules effective January 2025 and rationalised spectrum charges have further streamlined telecom infrastructure deployment.

Looking ahead, the IMF projects global GDP growth at 3.3% in 2026, supported by AI-driven investment and easing trade conditions. RBI has estimated Indian GDP growth at 6.6% in FY27, maintaining its status of the fastest-growing major economy globally. This divergence underscores Indias increasing weight in the global economy and highlights the critical role of its digital infrastructure and telecommunications ecosystem as long-term enablers of inclusive and sustainable growth.

Indian Telecom Industry Overview:

Indias telecommunications sector continues to serve as a foundational pillar of the countrys digital ecosystem, supported by its scale, affordability and rapid technology advancements. Indias total telephone user base (incl. FWA, M2M Cellular and Mobile connections) stood at approximately 1.33 Billion, with wireless base at 1.28 Billion. Wireless Mobile customer base (excl.M2M) increased to 1.14 Billion in FY26 from 1.13 Billion in FY25. Calculated Wireless Mobile tele-density (excl. M2M) stood at 80.0%, indicating a significant headroom for broadband penetration.

2nd

largest in the world - by telephone users

1.27 Billion

Wireless mobile users -

The sectors performance remained strong in 2025-26, characterised by sustained investments in next-generation digital networks, rising consumption of digital services and improving monetisation across operators.

5G continues to proliferate across the country and Government disclosures 1 indicate that 5G services have been rolled out across all States/UTs and are available in 99.9% of districts, with close to 540K 5G BTS installed as of March 2026.

Amongst worlds fastest

5G deployment -

99.9%

Districts covered nationwide -

427 Mn

5G customers in India -

Telecom operators continue to focus on network densification and capacity enhancement, involving deployment of new sites, small cells and strengthening

1 Press Release Page I Press Information Bureau of backhaul infrastructure to address the rising data traffic. The densification phase also has clear implications for fixed access strategies. The existence of 16.6 Million Fixed Wireless Access (FWA) customers (5G FWA + UBR FWA) as of March 2026 is a material indicator that FWA is becoming a scaled broadband delivery vehicle in India. FWA customer base witnessed substantial growth during FY26 and increased by 1.5x vs FY25 to 16.6 Million.

As per Nokia MbiT Index Report 20 26 2 , 5G FWA is increasingly becoming a major growth catalyst as 5G FWA customers consume nearly 10x more data per month than mobile-only customers, with its customer base more than doubling YoY in 2025. Low data tariffs, estimated at USD 0.16 per GB compared to a global average of USD 2.5-2.6 per GB, continue to support high usage levels.

Device ecosystem maturity is a key reason that the 5G adoption curve is accelerating, with 90% of smartphones shipped in 2025 being 5G-ready, up from 79% in 2024. As per the Nokia MbiT Index Report 2026, India has 892 Million active 4G devices, of which 383 Million are already 5G-ready as of end 2025, up from 271 Million last year.

As per the latest Ericsson Mobility Report, global 5G subscriptions reached 2.9 Billion by the end of 2025, growing by about 616 Million during the year. Global 5G subscriptions are expected to reach over 6.4 Billion by 2031, accounting for around two-third of the total subscriptions. In India, 5G subscriptions are expected to reach around 980 Million by the end of 2030, accounting for 75% of the total user base. 5G is expected to contribute approximately USD 455 Billion to Indias economy between 2023 and 2040, underscoring its long-term economic impact.

The Government is undertaking initiatives to promote adoption of 5G use cases. The Government has setup 100 5G labs across the country, with focus on development of 5G use cases across education, agriculture, health, power, urban management, mining, logistics, resource management, tourism, sports, security, e- governance.

26.7 GB

Average monthly data usage -per wireless user per month forthe quarter ended March 2026- one of the highest globally

Indias telecom sector growth continues to be underpinned by strong data driven demand. As per TRAIs latest publication, total wireless data usage during the year ended March 2026 at 279 EB, increasing by 25% year-on-year. Average data usage

stood at 26.7 GB per wireless data user per month for the quarter ended March 2026, growing by 20% year-on-year. 5G data usage during the year almost doubled compared to the last year and now accounts for 38% of total data usage.

The rapid growth of Indias digital ecosystem - including payments, e-commerce and digital public infrastructure - remains closely linked to the expansion and reliability of telecom networks. In March 2026, UPI processed 22.64 Billion transactions with a value of 29.52 trillion. This dependence of high frequency digital payments telecom networks, reinforcing the strategic role of telecom sector in everyday lives of individuals and enterprises.

Despite being one of the highest data-consuming markets globally, India continues to have among the lowest mobile tariffs. A stronger and more rational tariff framework is essential for the long-term financial health of the sector and to enable sustained investments in digital infrastructure. Against this backdrop, telecom operators continued to invest in 5G network expansion during 2025-26, notwithstanding limited near-term visibility on large-scale consumer use cases and monetisation. Wireless ARPU was at 196 per month for the quarter ended March 2026. Crisil Ratings stated that rising data adoption in underpenetrated rural markets, combined with continued uptrading driven by higher data consumption, is expected to drive ARPU growth.

Indian telecoms next phase of growth depends less on volume expansion and more on ecosystem-led value creation, with telcos integrating daily-life services, MSME commerce/advertising and AI-powered personalisation to improve retention and monetisation.

Industry perspectives also indicate a broader structural shift. Insights from Boston Consulting Group suggest that telecom operators globally are moving towards AI-led network planning and capacity-driven investment strategies, aimed at improving efficiency and quality of service.

Industry developments during the year continue to improve the outlook for the sector, including Vodafone Ideas AGR relief and subsequent announcement on network expansion plans, along with BSNLs ongoing 4G rollout. These are expected to increase network investments, strengthen competitive positioning, and improve coverage. Indias Union Budget 2025-26 further aided the cause with a 810 Billion total outlay for the telecom sector, including 220 Billion for the amended BharatNet project and enhanced allocations for domestic telecom manufacturing under the PLI scheme. These investments represent a continued government commitment to bridging the rural digital divide and reducing Indias import dependence of network equipment.

FY2025-26 saw continued momentum in sector reforms, with the Telecommunications Act, 2023 providing a comprehensive and modern statutory framework for the industry. The Act introduces key provisions across areas such as spectrum management, user protection, regulatory sandboxing and the administration of the Digital Bharat Nidhi, aimed at enabling a more structured, transparent and innovation-friendly telecom ecosystem.

The enterprise segment remains relatively underpenetrated, contributing 10-15% of telecom revenues. With increasing digitalisation, demand for enterprise connectivity is expected to grow, driven by Cloud adoption, Internet of Things (loT) and Edge computing. This is expected to create a meaningful opportunity for telecom infrastructure providers to support evolving enterprise use cases, including high-capacity, low-latency and in-building connectivity solutions.

Indias telecom sector is entering a structurally stronger growth phase, underpinned by increasing data consumption, potential of tariff improvement, improving financial metrics and sustained policy support. With continued investments in network capacity, digital infrastructure and emerging technologies, the sector is well positioned to remain a key enabler of Indias long-term digital and economic growth.

Indian Telecom Tower Industry Overview:

During 2025-26, Indias telecom tower industry strengthened structurally, supported by improving sector fundamentals, resumption in operator investments, and a progressively enabling regulatory environment. The industry outlook has improved in recent periods, reflecting easing legacy receivable pressures, renewed network capital expenditure, and continued momentum in infrastructure expansion.

The industry is now transitioning from the initial phase of 5G rollout, which was largely driven by rapid macro site upgrades, to a more sustained phase of network densification and capacity augmentation. While early deployments focussed on achieving wide-area coverage, the next phase of growth is expected to be led by deeper densification of networks, particularly in urban areas, through incremental loading on existing towers, deployment of small cells, and expansion of in-building solutions.

Indias telecom infrastructure base has expanded significantly to support the 5G evolution. Total telecom towers in the country stood at approximately 855K as of March 2026, with total base transceiver stations (BTS) reaching around 3.2 Million (as per DIPA Gridline 2025). At the same time, the countrys optical fibre network expanded to approximately 4.3 Million route kilometres by December 2025, nearly doubling from 1.9 Million route kilometres in 2019, significantly strengthening backhaul capacity across the network.

The regulatory landscape continues to play a pivotal role in enabling infrastructure expansion. Reforms aimed at simplifying and standardising Right-of-Way (RoW) processes have materially improved rollout timelines and ease of deployment. Approval timelines have reduced sharply from approximately 448 days in 2019 to nearly 34 days in 2025.

In addition, the Government has digitised the approval ecosystem, with the Department of Telecommunications (DoT) disposing of approximately 381K RoW applications through the GatiShakti Sanchar portal till December 2025 since its launch, significantly improving transparency and execution efficiency. Policy measures such as nil-fee provisions for small cell deployment on public infrastructure and promotion of infrastructure sharing are further improving rollout economics.

Small cells are expected to play a central role in the next phase of network evolution. Macro towers alone are insufficient to deliver the coverage and capacity required in dense urban environments, enterprise use cases, and indoor settings.

Despite this progress, fibre penetration at tower sites remains relatively low. Only 46% of Indias mobile towers are currently connected via fibre (as per Draft National Telecom Policy 2025). Recognising this gap, the National Telecom Policy (NTP) 2025 has set an ambitious target of achieving 80% tower fiberisation by 2030. This is particularly critical as 5G networks require significantly higher backhaul capacity- estimated at 10-20 Gbps per site compared to 1 Gbps for 4G, making fibre connectivity increasingly essential for network performance.

The growth of Indias digital economy is projected to expand to $1 trillion by 2030 (as per GSMA Digital Nations 2025), reinforcing the long-term demand outlook for telecom infrastructure. . This creates a strong multiplier effect, where incremental growth in digital adoption translates into sustained demand for towers, fibre, and distributed infrastructure.

Three key structural drivers are shaping the industrys trajectory. First, the continued expansion of 5G networks and rising customer adoption are driving incremental demand for network capacity and densification. Second, Vodafone Ideas resumption of network investments after a prolonged period of constrained spending is expected to support incremental infrastructure demand. Third, favorable regulatory regime and policy support are reducing deployment friction and enabling faster, more cost-efficient rollout of telecom infrastructure.

Rural connectivity remains a critical growth lever for the industry. While mobile broadband coverage has expanded significantly, a meaningful portion of the population remains under-connected. Rural tele-density continues to lag urban areas which have tele-density (incl. M2M) of 151.5%. Rural tele-density stood at approximately 60.5% and rural customers at 551.8 Million, making up 41.5% of the total customer base. This highlights a substantial addressable opportunity for further network expansion.

Government-led initiatives are expected to play a key role in unlocking this opportunity. Programmes such as BharatNet Phase III aim to connect approximately 265K Gram Panchayats and extend broadband access to around 15 Million rural households, supported by significant budgetary allocations (as per Union Budget FY26 and DoT disclosures). These initiatives are expected to materially improve rural fibre infrastructure, reduce backhaul costs, and enhance the viability of rural tower deployments.

Energy management continues to be a key operational focus, particularly in regions with unreliable grid supply. The industry is progressively transitioning toward renewable and hybrid energy solutions, supported by favourable policy frameworks and cost optimisation considerations. This transition not only supports sustainability objectives but also enhances long-term operating efficiency.

In August 2025, a favorable ruling was delivered by the Honble Apex Court in the case of Commissioner, CGST vs. Bharti Airtel Limited, wherein the Honble Court dismissed the Special Leave Petition of the Revenue and upheld the judgment of the Delhi High Court. The Honble Delhi High Court, relying on the earlier Supreme Court ruling, reaffirmed that telecom towers are classified as movable property, and hence input tax credit (ITC) on the same is admissible. The ruling is a significant positive for the sector, improving returns on new deployments and potentially enabling recovery of previously disputed credits. Overall, the judgment strengthens the economics and tax efficiency of the telecom tower business model.

Overall, the telecom tower industry remains well positioned for sustained growth, supported by strong underlying demand for data, continued investments in network infrastructure, supportive policy framework, and the expanding role of digital connectivity in the broader economy. The sector is steadily evolving from a passive infrastructure provider to a more integrated digital infrastructure platform, capable of supporting a wide range of connectivity and next-generation technology use cases.

Industry Updates:

Regulatory and Policy Momentum

The regulatory environment remained supportive during the year, with continued focus on simplifying and standardising telecom infrastructure deployment. The operationalisation of the Right-of- Way (RoW) Rules, 2024 across 33 states and union territories has brought greater uniformity and predictability to site rollout processes, addressing long-standing bottlenecks.

In parallel, the Green Energy Open Access policy has been notified in 28 states, enabling telecom infrastructure providers to increasingly transition toward renewable energy sources. Government-led initiatives such as the rollout of smart meters at telecom sites and the implementation of composite billing across 14 states are expected to enhance operational efficiency, improve visibility on energy consumption, and simplify billing processes.

Additionally, the draft telecom policy released in July 2025 outlines an ambitious roadmap for the sector, targeting 1 trillion of annual investments, creation of 1 Million jobs by 2030, and accelerated adoption of emerging technologies including 5G, 6G, artificial intelligence, IoT, satellite communications, and quantum technologies. The Government continues to play a facilitative role, including efforts to streamline RoW approvals in sensitive and border regions to improve connectivity.

The Government continued to play an active role in expanding digital infrastructure, particularly through public sector initiatives. BSNL has significantly scaled its network rollout, with approximately 97,000 4G sites already deployed and plans to add around 23,000 additional sites. These sites are designed to be upgradeable to 5G, supporting future technology evolution. This expansion is expected to strengthen connectivity in rural and semi-urban areas, thereby supporting broader digital inclusion and creating incremental infrastructure demand across the ecosystem.

Industry Structure and Monetisation

The telecom sector continued to move toward improved monetisation during the year. Operators undertook calibrated pricing actions, including the withdrawal of entry-level prepaid plans in the 249 segment, effectively encouraging customers to migrate to higher-value plans. These measures are expected to support gradual improvement in ARPU, even in the absence of a formal headline tariff hike. The Government has also indicated that the telecom sectors contribution to Indias GDP is expected to increase from the current 12-14% to approximately 20% over the next decade, underscoring the growing strategic importance of the sector in the broader economy.

Satellite and Emerging Technologies

The year also saw meaningful progress in satellite communication and next-generation technologies. Starlink received key regulatory approvals, including a Global Mobile Personal Communication by Satellite (GMPCS) license, draft authorisation from Indian National Space Promotion and Authorisation Centre (IN-SPACe), and a Unified License, paving the way for the commercial rollout of satellite broadband services in India. With multiple players such as Eutelsat OneWeb and Jio Satellite already present, the satellite ecosystem in India is expanding, particularly for connectivity in remote and underserved regions. These developments, alongside advancements in AI, cloud computing, and digital infrastructure, point toward increasing convergence between telecom and adjacent technology domains.

Developments

Vodafone Idea witnessed important developments during the year, reflecting gradual improvement in its financial position and renewed focus on network investments. The Companys Board approved a potential fundraise of up to 200 Billion, aimed at supporting capital expenditure towards network expansion and technology upgrades to enhance its network competitiveness, improve service quality and progressively close the coverage and capacity gap with peers.

Additionally, in January 2026, the Government provided a significant relief by restructuring Vodafone Ideas adjusted gross revenue (AGR) dues through a staggered repayment schedule extending up to 2041. This restructuring is expected to materially ease near-term cash flow pressures and improve liquidity.

Overall, these developments are likely to support a gradual normalisation of Vodafone Ideas network investments after a prolonged period of constrained spending. An improvement in its financial flexibility and investment outlook is expected to translate into increased network rollout activity, including both coverage expansion and capacity augmentation. This could act as a meaningful driver of incremental demand for telecom infrastructure, particularly in terms of new site deployments as well as co-locations and network upgrades.

Company Updates:

Promoter

Reclassification

Vodafone shareholders had divested their residual shareholding of approximately 3.00% in the Company on December 05, 2024, resulting in their complete exit from the Companys ownership. Pursuant to this divestment, the Company initiated the process for reclassification of Vodafone Promoters from the Promoter category. Subsequently, the Stock Exchanges, through their letters dated May 15, 2025, approved the reclassification in accordance with Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This development marks a transition in the Companys shareholding structure, with no remaining ownership by Vodafone group entities.

Debt Management and NCD Redemption

The Company continued to strengthen its balance sheet through the timely repayment of its outstanding debt obligations. The Non-Convertible Debentures (NCDs) issued in December 2022, aggregating 15 Billion across three series, were progressively redeemed during the year. Series I NCDs amounting to 7.5 Billion were fully redeemed during the quarter ended December 31, 2024, followed by the redemption of Series II NCDs of 3.75 Billion during the quarter ended June 30, 2025. Subsequently, Series III NCDs aggregating 3.75 Billion were also redeemed during the quarter ended December 31, 2025. As a result of these repayments, the Company does not have any outstanding NCDs as at the end of the period, reflecting its strong financial position and disciplined capital management approach.

International

Expansion Strategy

_

During the year, the Company initiated its international expansion strategy in Africa across three initial markets-Nigeria, Uganda and Zambia. We see these markets at a stage of development comparable to where India stood a few years ago, offering a compelling growth runway for both telecom operators and infrastructure providers. Our approach is to leverage Indus established operating strengths by developing high-quality, cost-efficient infrastructure that is adapted to local market conditions, while maintaining strong service reliability for customers. This expansion is being undertaken at an opportune time, supported by favourable structural drivers, and the visibility of an anchor tenant in the form of Bharti Airtel from the outset.

We intend to adopt a calibrated approach by initially scaling through greenfield tower deployments, gaining a deeper understanding of local operating dynamics, and building a robust operating framework. Over time, we expect to leverage these learnings to expand into additional markets.

As part of the regulatory process. a wholly owned subsidiary, Indus Towers FZE, was incorporated in the United Arab Emirates, along with three step-down wholly owned subsidiaries, to support investment, management, and strategic initiatives outside India. The Company has also incorporated step-down subsidiaries in Nigeria, Uganda, and Zambia.

1.68

Tnwpr«t and a.

Financial Results &

Operations:

The Companys macro tower portfolio increased to 264,514 and macro colocations increased to 428,014 as on March 31, 2026. Total Co-locations on leaner towers stood at 14,044. For the year ended March 31, 2026, the closing sharing factor stood at 1.62 times per tower.

The consolidated revenues for the year, at 324,931 Mn grew by 7.9% over the corresponding period last year. EBITDA declined by 14% Year-on-Year to 179,756 Mn, representing an EBITDA margin of 55.3%. EBIT decreased by 25% Year-on-Year to 106,724 Mn and the net profit for the year fell by 28% Year-on-Year to 71,449 Mn. During FY25, a major customer cleared its overdues, amounting to roughly 51 Billion. Adjusted for this, EBITDA and net profit were up 11.4% and 13.0% respectively.

The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standard (Ind AS) notified under Section 133 of the Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and as amended by the Ministry of Corporate Affairs (MCA) from time to time.

Parameters*			Full Year Ended
	Unit	Mar26	Mar25	Mar24
Debtors Turnover	Times	6.69	5.37	5.05
Current Ratio	Times	1.72	1.32	1.03
Debt Equity Ratio	Times	0.02	0.07	0.16
Operating Profit Margin (%)	%	55.3%	69.2%	51.4%
Net Profit Margin (%)	%	22.0%	33.0%	21.1%
Interest Coverage Ratio 1	Times	11.59	14.48	19.98
Inventory Turnover	NA	NA	NA	NA
Average Sharing Factor	Times	1.62	1.65	1.72
Closing Sharing Factor	Times	1.62	1.63	1.68
Sharing Revenue per Tower p.m		66,995	67,422	71,034
Sharing Revenue per Sharing Operator p.m		41,302	40,856	41,198
Return on Shareholders Equity Pre Tax	%	26.61%	44.19%	33.74%
Return on Shareholders Equity Post tax	%	19.81%	33.36%	25.07%

1 Interest coverage ratio: It is computed by dividing EBITDA for the preceding (last) 12 months from the end of relevant period by finance cost (net) for the preceding (last) 12 months excluding lease liabilities

The financial ratios with a change of at least 25% during the year have been explained as below:

The profitability ratios show a YoY decline due to higher base of FY25. The higher base in FY25 was primarily because of significant collection of overdue receivables from one of the companys major customers.

The debt equity ratio decline was due to the Company repaying a significant portion of its debt. This was supplemented by the growth in profit resulting in an increase in the retained earnings, and subsequently in the shareholders equity.

Opportunities and Threats:

Opportunities

Sustained Network Expansion

Indias 5G rollout has entered a more mature phase, with operators increasingly focussing on network densification, capacity augmentation, and improving indoor coverage. This shift is expected to drive incremental demand for tower infrastructure through additional equipment loading, site upgrades, and selective new tower deployments. While initial 5G investments were largely concentrated on existing sites, the next phase of network evolution is likely to require a denser grid of sites to support rising data consumption and quality-of-service expectations. In parallel, continued 4G expansion by certain operators to address coverage gaps is expected to further support demand for new sites, co-locations, and amendments.

Rural Connectivity

Despite significant progress in mobile connectivity, large parts of rural and remote regions remain under-served, presenting a long-term opportunity for infrastructure expansion. Government-led initiatives and funding programmes aimed at improving connectivity in such regions are expected to support incremental tower deployments, particularly in areas where commercial viability is relatively limited. As telecom service providers continue to strengthen their rural footprint and improve network parity, demand for infrastructure in these regions is expected to remain robust.

Strategic Consolidation

The telecom infrastructure landscape continues to offer opportunities for strategic consolidation, given the presence of multiple smaller players alongside large incumbents. This provides scope for acquisitions that can enhance scale, improve operational efficiencies, and strengthen market positioning. In addition to traditional tower assets, inorganic growth opportunities may also emerge in adjacent segments such as fibre networks, small cells, and digital infrastructure platforms, enabling companies to diversify and expand their infrastructure portfolio.

Green Energy Adoption and Efficiency Gains

The transition toward renewable and hybrid energy solutions at telecom sites presents a significant opportunity to reduce operating costs and improve sustainability outcomes. Increasing adoption of solar and other clean energy solutions can help reduce dependence on diesel and conventional grid power. Policy initiatives such as Green Energy Open Access further enable direct procurement of renewable energy, supporting cost efficiency and long-term sustainability goals. Participation in energy infrastructure deployment also creates an additional avenue for value creation.

Evolving Business Models and Digital Infrastructure Adjacencies

As the telecom ecosystem evolves, infrastructure providers are increasingly exploring opportunities beyond traditional tower operations. These include in-building solutions (DAS), small cell deployments, fibre connectivity, and support for private enterprise networks. The growing demand for high-speed, low-latency connectivity across enterprises, campuses, and urban environments is expected to drive adoption of such solutions. Over time, emerging areas such as distributed digital infrastructure may provide additional growth avenues, leveraging existing tower assets and power capabilities.

Threats

Regulatory and Policy Risks

Telecom infrastructure remains subject to a complex regulatory environment, including approvals, permits, and local compliance requirements. While recent reforms such as the RoW Rules, 2024 aim to streamline deployment processes, implementation may vary across regions, potentially leading to delays in site rollout. Evolving regulatory frameworks, including sustainability-related requirements and policy changes, may also introduce additional compliance obligations over time.

Financial and Market Risks

Tower companies typically depend on a limited number of large telecom operators as tenants, resulting in customer concentration risk. Any financial stress, consolidation, or strategic shift by key tenants can impact revenues and growth prospects. Telecom operators continue to face significant capital commitments toward spectrum and network investments, regulatory dues (including AGR instalments), which may constrain their ability to meet financial obligations and sustain network expansion at the same pace.

Technological Risks

Rapid advancements in technology may alter traditional infrastructure demand patterns. Increased adoption of active network sharing arrangements among operators could reduce the need for separate tenancies. Additionally, the emergence of non-terrestrial networks such as satellite broadband, while not a direct substitute for terrestrial networks in urban areas, may provide alternative connectivity solutions in certain use cases, particularly in remote regions.

Environmental and Energy Risks

Telecom tower operations are energy-intensive and are exposed to risks arising from power availability and cost headwinds. In regions with unreliable grid supply, dependence on diesel generators can lead to higher operating costs and increased carbon emissions. Rising fuel prices and evolving environmental regulations may further impact cost structures. Additionally, extreme weather events such as cyclones, floods, and heatwaves pose risks to infrastructure integrity and service continuity.

Operational and Execution Risks

Managing a large portfolio of geographically dispersed tower sites involves inherent operational challenges. Site acquisition, acquiring permits, and lease negotiations can be time-consuming and subject to local constraints. Security risks such as battery theft, fuel pilferage, and vandalism, particularly in remote areas, can disrupt operations and increase costs. Delays in site rollout or maintenance can impact service quality and customer satisfaction.

Impact of TSP Consolidation on Infrastructure Sharing

The benefits of passive infrastructure sharing are closely linked to the number of active telecom operators in the market. Continued consolidation within the telecom sector may reduce the scope for co-location and shared infrastructure usage, thereby impacting tenancy growth and limiting the economic advantages of the shared infrastructure model.

Emerging Competitive Threat from Alternative Infrastructure

The increasing adoption of alternative infrastructure formats such as small cells and lean towers for network densification may intensify competition within the sector. Smaller and more agile players may be able to deploy such solutions more rapidly and at competitive costs, potentially exerting pricing pressure on established tower Companies.

Risks Associated with Contract Renewals

The renegotiation of long-term customer contracts presents a potential risk to future revenues. As agreements approach renewal, there may be risk of customer exit or changes to pricing structures, escalation clauses, and commercial terms. A revision in terms could impact revenue visibility and profitability.

Electromagnetic Field (EMF) Compliance and Public Perception

Telecom towers are subject to stringent EMF exposure norms in India, which are among the most conservative globally. Compliance is regularly monitored through audits and inspections by regulatory authorities, with non-compliance attracting penalties and potential shutdown of sites. Despite adherence to established standards and scientific evidence indicating minimal health risks, public perception and local opposition in certain areas may pose challenges to site acquisition and network expansion.

Strategy/Outlook:

The Company continues to execute its strategy with a clear focus on strengthening market leadership, driving structural efficiencies and building a future-ready infrastructure and resilient business. Our approach is anchored in disciplined capital allocation, operational excellence and increasing adoption of digital and sustainable solutions, enabling us to consistently deliver value to our customers while positioning the business for long-term growth. Detailed discussion on Strategy forms part of Strategy section of this integrated report.

Market Share and Customer Growth

We continue to reinforce our leadership through our extensive tower portfolio, strong execution capabilities and consistent service delivery, enabling us to capture a meaningful share of customer rollouts and strategic deployments. Deep, long-standing customer relationships and alignment with evolving network priorities position us as a preferred partner across expansion and transition needs.

This has driven incremental co-locations, selective portfolio transitions and sustained IBS momentum across enterprise and public segments. Our ability to deliver at scale, with speed and quality, alongside solution-led and customised deployments, continues to strengthen differentiation, support increased rollout participation and expand our network footprint to address growing data demand.

Cost Efficiency and Operational Excellence

Driving cost efficiency is central to our ways of working with focussed approach on driving structural improvements across operating and capital expenditure through scalable initiatives. We continue to enhance field productivity using digital tools, optimise site configurations and streamline workforce deployment, supported by standardised processes and stronger governance for improved cost visibility and planning.

Energy efficiency remains a key lever, with accelerated transition towards electrification, solar solutions and advanced storage technologies, reducing diesel dependency. On capital allocation, we maintain a disciplined approach through standardised frameworks, design and procurement optimisation and rigorous investment evaluation, enabling operating leverage, stronger cost competitiveness and sustained value creation without compromising service quality.

Network Uptime and Delivery Excellence

Delivering high network uptime remains central to our value proposition and a key differentiator in the market. We continue to enhance service reliability through improved processes, proactive maintenance and greater adoption of digital monitoring tools, enabling consistent delivery of superior service quality and strengthening customer confidence.

Digital Transformation

Digital transformation is accelerated across our operations, with ongoing efforts to convert our tower portfolio into fully digitised infrastructure assets. Deployment of IoT-enabled solutions, advanced analytics and AI-led tools is enabling real-time visibility, improving decision-making and reducing manual interventions, thereby enhancing operational efficiency and asset utilisation.

Sustainability Leadership

We continue to embed sustainability deeply into our operating framework, with a strong focus across environmental, social and governance priorities. From an environmental perspective, we have strengthened our approach towards climate resilience by undertaking a comprehensive climate risk assessment across operations, enhancing our understanding of both physical and transition risks and integrating these insights into long-term planning. In line with our broader decarbonisation agenda and SBTi-aligned targets, we have also progressed on defining a clear roadmap to reduce emissions, with continued emphasis on lowering diesel dependence and transitioning towards cleaner energy sources.

We remain focussed on building a safe, inclusive and future-ready organisation. Workplace safety continues to be a top priority, with targeted initiatives and campaigns aimed at strengthening safety practices and minimising risks for employees and partners. Our focus on improving participation of female employees in our workforce by implementing policies and providing an inclusive environment has been yielding positive results as our gender diversity further improved from 16.2% in FY25 to 18.3% in FY26. Our CSR initiatives continue to deliver meaningful impact at scale, spanning education, digital inclusion and community development, while also enabling timely support in disaster-affected regions.

We have further strengthened accountability and transparency by integrating ESG parameters into partner selection and procurement processes, thereby extending our sustainability agenda across the value chain. Our continued progress in this area is also reflected in improving external ESG ratings, underscoring the effectiveness and consistency of our approach.

Outlook

Looking ahead, we remain well positioned to capitalise on sustained network expansion by telecom operators and rising data demand, supported by our strong execution capabilities and robust portfolio. Improving financial and operational position of a key customer is expected to support a gradual normalisation of network investments and rollout activity, providing incremental growth visibility. Our continued focus on cost efficiency, digital transformation and sustainability, along with deep customer partnerships, provides confidence in our ability to drive consistent growth, enhance competitiveness and deliver sustainable long-term returns. Our entry into Africa marks a strategic international expansion and will be a key enabler of sustained long-term growth.

Risks & Concerns

The following section presents an overview of the Companys enterprise-wide risk management approach. The information provided is indicative and not exhaustive and is intended for general reference. Indus Towers Limited believes that effective risk management and robust internal controls are fundamental to sound corporate governance and long-term sustainability.

The Company has established a comprehensive framework to identify, assess and mitigate key risks across its operations. These include risks related to competition, customer health, regulatory compliance, technological evolution, asset management and people safety. A detailed discussion is provided in the Risk Management Framework section of this Integrated Report.

Internal Control Systems and their Adequacy

The Chief Executive Officer (CEO) and Chief Financial Officer (CFO) hold responsibility for ensuring robust financial controls, evaluated against objective metrics on accounting hygiene and audit scores. The Company has implemented a comprehensive internal control system that enables the accurate and timely preparation of financial statements and management reports, ensures compliance with regulatory and statutory requirements, and upholds the interests of investors through exemplary governance and regular investor communications.

The Audit & Risk Management Committee provides oversight by reviewing the effectiveness of the Companys internal control mechanisms. As part of the Corporate Governance Report, the Managing Director & CEO and the Chief Financial Officer, certifies the effectiveness of the Companys internal control

procedures. Additionally, the Internal Assurance Group conducts periodic assurance reviews to evaluate the adequacy of internal control systems and reports its findings to the Audit & Risk Management Committee of the Board.

The Company has further strengthened its internal control framework across all circle operations. This includes significant enhancements in the quality and frequency of reconciliations, expanded coverage of revenue assurance checks, segregation of duties, implementation of self-validation mechanisms, regular physical verifications, system audits, desktop reviews, and ongoing training and education initiatives.

Human Resources

At Indus Towers, people strategy is a core pillar of sustainable value creation. In 2025-26, it continued to enable strong operational performance, guided by core values and evolving business priorities, with sustained focus on leadership strength, workforce capability, and execution excellence.

During the year, significant progress was made in strengthening leadership depth and succession readiness. Approximately 85% of key leadership positions were filled through internal talent, reflecting the strength of the Companys succession planning framework and its ability to build and retain critical capabilities in-house. Organisational agility was further enhanced through large-scale talent mobility, with over 1,000 employees moved across roles and circles. This enabled faster deployment of talent to priority areas, improved cross-functional capability, and reduced reliance on external hiring for critical roles. Focussed investments in capability building continued across levels. Over 150 high-performing and high-potential Field Engineers were transitioned into specialist and critical roles, strengthening frontline effectiveness and building a robust pipeline for technical and operational leadership.

Employee engagement and development remained priority areas, enabled through a strengthened rewards and recognition framework with continued investments in learning and development. A blended learning ecosystem and targeted leadership programs ensured capability building at scale, aligned to both current and future business needs. In parallel, the Company strengthened its leadership pipeline through curated in-campus programs with leading Tier 1 institutions, such as Kshitij - Senior Leadership Development Program with IIM Ahmedabad, Unnati - Emerging Leader Program with IIM Lucknow, and Udaan - Young Leader Program with IIM Udaipur. These programs focussed on developing high-potential talent and enabling holistic development through

structured learning, cross-functional exposure, and leadership orientation aligned to future capability requirements. Leadership engagement was further strengthened through structured forums and various Leadership Connect Programs, enabling deeper connection and effective two-way communication across the organisation.

Diversity and inclusion continued to be strategic priorities, with sustained progress in gender representation. Over the past three years, gender diversity has improved three-fold, increasing from 6.3% in 2022-23 to 18.3% in 2025-26. This progress has been supported by inclusive hiring, providing growth opportunities and enabling learning & development through focussed interventions such as Shakti - a leadership development program in partnership with

IIM Indore; Prerna - a structured mentorship initiative; and Sangini - a community-building platform for women employees aimed at strengthening inclusion, development, and retention.

The Company remains committed to maintaining a safe, respectful, and high-integrity workplace, supported by robust governance mechanisms, including comprehensive compliance coverage across the organisation. The Company will continue to focus on strengthening leadership pipeline depth, enhancing workforce productivity, leveraging digital and data-led HR interventions, to support sustainable growth and execution excellence.

As on March 31, 2026, the total headcount of the Company stood at 3,795 employees.