Good afternoon, ladies and gentlemen. I am Rajita, the moderator for this conference. Welcome to Indus Towers Limited second quarter ended September 30th, 2021 earnings call. For the duration of the presentation, all participant lines will be in the listen only mode. After the presentation, the question and answer session will be conducted for all the participants on this call. In case of a natural disaster, the conference call will be culminated post an announcement. Present with us on the call today is the senior leadership team of Indus Towers. Before I hand over the call, I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. I now hand over the call to our first speaker of the day, Mr. Bimal Dayal, MD and CEO of Indus Towers. Thank you, and over to you, Mr. Dayal. Thank you. Thank you very much, Rajita. A very good afternoon to all of you joined the call today. I welcome you all to the earnings call of Indus Towers for the second quarter ended September 30th. Incidentally, this is the fourth quarterly call we are having post the merger. Joining me on the call today are Mr. Vikas Poddar, our CFO, Mr. Kaustav Neogi, Finance Controller, and Mr. Dheeraj Agarwal, whom we introduced last time, our Head Investor Relations. Well, as you would probably have read, but I certainly wanted to stress upon this fact that this has been a very significant quarter in more ways than one. First of all, let me cover the demand aspect wherein once again the data consumption as reported by the operators has grown 41% year-on-year and 100% over the last two years. This is quite commendable as the growth is coming in over a large base already and is quite noteworthy. Since this is a primary driver for growth in towers, I think this is certainly significant to call out. We continue to benefit from this insatiable demand for data across operators and across geographies. The thing which is another significant and needs to be called out is what happened in this quarter is the government's telecom relief package that was announced on the 15th of September. In my experience, I think we have been sharing our optimism and obviously this is a we told you so kind of a moment as well, that this has pumped in a huge amount of optimism around the industry with the risk of two plus one operator, you know, that risk going down considerably. What also needs to be called out here is the way the package was structured. Three areas of broad categorization, namely the structural reforms, the procedural reforms, and the liquidity reforms, gives a very clear intent on the part of the government of India to play a very facilitative role in growing this sector and besides the sector in the 5G era as well. We as Indus Towers, we welcome the package and like to see further clarity and through a new shape of our operators under this new relief package. Since the package also talks about the auction window, the next step of rolling out of 5G becomes almost clear and certain. Talking of which, if we actually look at globally what's going on in the 5G arena, commercially there are almost 176 network providers who are already ahead of us, and they have rolled out 5G subscriptions, which stand at almost 84 million and surpassed the additional addition of 4G subscribers this quarter, which actually sits at 71 million in quarter one financial year of 2021. This is as per Ericsson Mobility Report. This would certainly keep us busy in coming quarters if the auction takes place in quarter four. We eagerly look forward to the auctions and the rollout of 5G. On operational and financial performance, we have had a good quarter. We ended the quarter at 183,000 towers, 313,000 co-locations, which represent a healthy year-on-year growth of 7% and 6%, respectively. Consequently, our tenancy ratio has improved to 1.81 at the end of this quarter, which stands as industry best. There is a change in the methodology of reporting of towers and co-location, as the consolidation of the industry is largely muted, which Vikas will explain it to you soon. With this, let me hand it over to Vikas to take you through the financial results, post which I look forward to our interaction. Over to you, Vikas, and thank you. Thank you, Bimal, and a very good afternoon to all the participants on this call. I'm pleased to share with you the financial results of the second quarter ended September 30, 2021. Reiterating what Bimal said, we had a good second quarter from both operational and financial performance standpoint. As we are coming out of the pandemic situation, we are seeing the business activities return to normalcy. Our field activities have also picked up in quarter two, post the lockdown restrictions. Our total towers and co-locations at the end of the quarter were up by 7% and 6% year-on-year respectively. Reporting of towers and co-locations has been changed from notice basis to actual exit basis with effect from July 2021. During the consolidation phase of the telecom industry, Indus had adopted a conservative approach, starting December 2018, of reporting the exit basis notices received vis-à-vis the previous method of reporting. Now, with the stabilization in the industry and the reducing trend of exits, Indus has returned to the earlier approach of reporting churn based on actual to represent the actual co-locations and the tenancies built. This has resulted in one-time addition of 3,630 co-locations in the closing base for the quarter, for the second quarter. Coming to the financial performance for the second quarter, we have witnessed a strong year-on-year growth. Please note that this growth is over the quarter two of last year and reflects the impact of some of the accounting practices that we aligned post-merger. Our gross revenues were up 8.1% year-on-year, and 1.2% quarter-on-quarter to INR 68.8 billion. Within that, our core revenue from rentals also grew, and was up 5.9% year-on-year, and 1% sequentially quarter-on-quarter to INR 42.5 billion. Our EBITDA grew 16.8% year-on-year and 3.2% quarter-on-quarter to INR 36.4 billion. This was aided by reduction in other expenses on account of reversal of bad debt provision, post the collection of some aged outstandings. Consequently, EBITDA margin improved by 3.9 percentage points year-on-year and 1 percentage point quarter-on-quarter to 15.9%. 52.9%, I'm sorry. Improvement in energy reimbursements and tight control over the network costs have supported the profitability growth. Improvement in energy margin was mainly driven by the sustained efforts of the company towards reconciling differences with our customers. Our profit after tax was significantly up by 37.8% year-on-year, and 10% quarter-on-quarter to INR 15.6 billion. This includes approximately INR 400 million of tax benefits on account of long-term capital gain on investments. Our free cash flow for the quarter was lower than our expectations, mainly due to increase in receivables by INR 10.7 billion. The same was on account of two reasons. Firstly, approximately 30% was on account of challenges in the billing system integration, and the remaining due to continued delay in payment from our customers, as we had indicated in quarter one. We expect things to improve with the announcement of the relief package that should address the liquidity concerns of the operator. Furthermore, we are adequately covered by the security package, and this gives us the confidence that the situation should start to improve soon. Both pre-tax return on capital employed and post-tax return on equity on the trailing 12-month basis were up year-on-year and quarter-on-quarter to 23.8% and 30.9% respectively. This was largely driven by the earnings growth. I would like to reiterate that the significant increase in earnings over the last year was also helped by change in accounting practices post-merger. We started recognizing the exit revenue from quarter three of FY 2020 on an accrual basis due to certainty of receivables backed by the security package. This also led to one-time increase in overall revenue for quarter three last year. As you would be aware, the recognition of exit revenue will be completed by quarter three of current financial year, and we will just continue with recognizing a material part of the exit revenue from quarter four of this fiscal. However, after adjusting for these changes, our performance was quite healthy on both year-on-year and quarter-on-quarter basis. All in all, I would say it was a good quarter. With that, I would like to open the floor for question and answer please. Thank you. We will now begin the question and answer interactive session for all the participants who are connected to the audio conference service from Airtel. Due to time constraints, we would request if you could limit the number of questions to two to enable more participation. Hence, management will take only two questions per participant to ensure maximum participation. Participants who wish to ask questions may please press star one on their touchtone enabled telephone keypad. The first question comes from Mr. Vivekanand Subbaraman from Ambit Capital, Mumbai. Mr. Subbaraman, you may ask your question now. Hi. Thank you for the opportunity. My two questions. First one is on the opportunities that you are seeing beyond the tower sharing. So fiberization, small cells. Could you elaborate on that a little bit? Was that a meaningful contributor to revenue, you know, even more than 5% or something? Is that something you want to talk about right now? That's question one. Secondly, the exit charges that you have of INR 184 crore that were recognized in the current quarter. Would it be possible to provide comparable pro forma numbers for the same quarter last year, and a guidance on where this number would look like for fiscal 2023? Thank you. Thank you. Thank you, Vivekanand, for these two questions. I'll take the first one, and I think this is about the overall strategy of Indus, and I would have actually touched upon during my closing remarks as well. We have been saying that we will share our Indus strategy in detail in coming quarters as well. I think we have taken a quarter more than what we should have. We need to actually realize that this overhang of one of the operators is now relatively reduced. The further consolidation in our industry is possibly a little bit of a remote possibility. We are certain to come back to you with our overall strategy within this quarter itself. Now, your question was more around the opportunity beyond our current line of business. I think we are certainly and clearly excited about the small cells, the in-building, which I think comes as a package with 5G and it's becoming a lot more relevant as well. I think there are lots of internal realignment which is going on specifically on this topic. On the other hand, to make this real, fiberization both underground and above-ground fiber is something which is a very clear opportunity which we are actually aligning ourselves to as well. I also spoke about the non-telecom kind of opportunities as well, which from, you know, some kind of trialing which is coming to us through smart cities opportunity, which we have four of them together. I actually would like to unravel all this as a package when we release our strategy to you as well. Needless to say that I think we are more than ready to really share this as well, which we will come back to you within this quarter, and can throw some more light on each one of these, which would be some kind of a vertical within here as well. Some of these aspects would actually go in explore and trial phase for Indus. On the exit charges, maybe Vikas, you can throw some color and light on this one. Yeah, sure. Thank you, Vivekanand. I think on the exit charges, against INR 184 crore of exit charges that we recognized in quarter two of this year, the same figure last year was about INR 175 crore. So really, the year-on-year growth has not so much been driven by the exit charges as far as quarter two is concerned. Quarter three, we will still see exit charges coming through, although we can expect a small decline of about INR 160 crore-INR 170 crore. Then the tapering that I was talking about would eventually start becoming visible from quarter four. So that's on the exit charge. Yeah. Thank you. This helps. Yes. Bimal, yes, we'll wait for your commentary on the opportunities. Thank you. Thank you, everyone, and Vivekanand for your patience. Thank you very much, Mr. Subbaraman. The next question comes from Mr. Arun Prasath from Spark Capital, Chennai. Mr. Prasath, you may ask your question now. Thank you for the opportunity. My first question is on the energy model, that is energy margins, especially the FEM versus pass through that we keep talking. Can you give a brief summary of what exactly is currently the telcos' apprehension regarding shifting to FEM? What would be the ideal time frame that you are targeting internally? That is my first question, sir. Okay. Would you like to ask both the questions, Arun? Yeah. I think. Once you finish that, probably I'll go for second one. Okay, good. The second is on the topic, but I'll come to that. Okay. Thank you. Your question is around the energy margin and, you know, the time frame for the FEM. Look, I think, if you go into the track record, we've been always saying that there has been good engagement which is going on, and that has been absolutely true. There is no sort of a resistance. However, there is good amount of alignment as well that all of us as an industry, between us and telcos as well, there is an alignment that we need to tread the path of fixed energy model as well. I think, if I were to say that we have been wrong with our timing because we've been saying that we'll be able to close it soon. However, one thing I can clearly and say it with certainty that we will be dealing with our operators only through FEM. You know, it will take time. I can only say that this quarter, we can possibly aim to have at least one of the two operators coming into fixed energy model. Then subsequently, we'll work on the last one as well. I think, that is possibly the best I can share with you. Only thing which I would like to say once again is, this is such a beautiful model, that this makes both operators and us sit on the same side of the table and do the right things, which is to reduce the energy as well. I think, this works well because operators get reduction and we certainly have an opportunity to really make some money off this as well. I think, we are certainly treading this path as well. Operators did have their own priorities as well. If you actually look at one of them was absolutely and financially stressed as well. The second one can always say was actually exploring the baseline as well and having done that, I think, we are reaching to a point where we can see some closures as well. Just a clear input here as well that, you know, timing here is difficult to comment, but I'm very hopeful that in the coming quarter we'll be able to share a good news of at least one of the two operators signing off on ATM. If I understand you correctly, the baseline at which the tariff is about to be frozen is the key disagreement between the tower co and the telco. Is it right? Well, I won't even say there is a disagreement here as well because there is a right moment where, you know, the operators feel that there is a reasonable grip of what they want, what they want now, and what they want in the future, and it has to pop out as their priority. I can say that with our discussions and negotiations, we are closer than what we were last quarter. Hence, it gives me courage that we might and should be able to close it this quarter. Oh, okay. All right, sir. My second question is on the CapEx whatever. Given that CapEx involves a lot of commodity materials such as steel and cement, and given that also the technology, the engineering is also in a mature stage, what exactly is the competitive advantage that Indus has against its state peers? Is it just size and lower cost of capital, or is there anything which can be truly attributed to Indus which will result in a go to. I am of course not talking about the right of first refusal. Beyond that, what is truly the competitive advantage for Indus when it comes to CapEx? Can you describe this please, sir? Thank you, Arun. Let me understand your question. Well, you are actually pointing towards, you know, the innovation which Indus is into, both in terms of how we manage the sites and how we build the sites as well. Am I right in paraphrasing your question? Sir, I'm asking how competitive your tariffs are and what are the reasons for that? Is it just a size and lower cost of capital, or is there anything else that you do apart from that that is resulting in a lower total cost of operation? Obviously, I think, there are a couple of things which I can table right now, and I think our merger has also given us a little bit of an edge as well. From, let's say, build innovation as well, I think, we had innovation going on one side at Infratel, and I think, we had some momentum on Indus side. Now, we are actually sitting with something which we can pick on both sides and replicate and emulate all across as well and get the least common factors across the circles as well. I think, this is giving us immense amount of replicable knowledge and wealth as well. I think, from here, we charter a territory which is our strong point, which is execution, as well. This is on one side. The other side is, you know, how we manage sites. If you actually look at both the companies, both Infratel and Indus were operating in very different territories and geographies and they were both operating very different models. I think, this also is giving us a lot of insights as to what the model of the future could be as well and get the operational metrics absolutely in order as well. Rather than giving you a number or an edge over competition where we stand, I think, we are choosing the best possible number and going for a replication, which is giving us a huge amount of things to work upon going forward. All right, sir. Thank you. Thank you for your replies. Thanks. Thank you, sir. Thank you very much, Mr. Prasath. The next question comes from Mr. Sanjesh Jain from ICICI Securities, Mumbai. Mr. Jain, you may ask your question now. Yeah, I have been. Can you hear me? Yeah. Hello? Yes, Sanjesh, go ahead. Yeah. Thank you. First on the receivable side, though in our opening remarks, we did mention that we expect a speedy recovery post the relief package. What is the receivable days one should work going forward? Should we see this impact coming from the very next quarter or it may take a few more quarter for us? What should be a steady state receivable days one should look at from here onwards? Sanjesh, thanks for that. I think the steady state receivable days usually is about 40, between 40-50. Currently we are a little over 70. How do we really see this improving is basically, we are expecting an improvement in quarter three, which is the current quarter. Then probably some of it will also come through in quarter four. Certainly, I mean, we really see this as a bit of a timing gap that really should unwind in the next two quarters. Fair enough. Just one related question on that, because we did mention that 30% of this receivable. I don't know whether you were talking about the incremental or the total base. Is there any risk of a write-off in this considering that it has been challenged? No. There's no write-off risk in any of our receivables. We really believe that our receivables are good receivables. We do have a policy, as a result of which, we need to provide and make provisions for bad debts when they are overdue beyond a certain number of days. We also do write back or reversal of those provisions as and when we collect some of the old receivables. As in opening remarks, in the other expense, which you see is significantly lower year-on-year. A large part of that is also because of just managing to collect some of the old receivables, old outstandings. It's basically a policy-driven thing. We don't believe that the receivables are bad receivables. Fair enough. This 30% number you mentioned, that 30% number is on the total receivable or the receivable which increased in the Q2 of this quarter? This is on the incremental receivables for the quarter. This is on the incremental. That's good enough. The second is on the single tower expansion. This has been a trend previously, where we can understand that there was an operator who were exiting the tenancy, but now even post the cancellation, looks like there are towers which are single tenancy towers. What's the outlook for us? When should we see incremental tenancy sharing ratio to be higher than the underlying tenancy sharing ratio? This is, in fact, we have to go back in time, Sanjesh. In the previous quarters, let's say quarter three and quarter four last financial year, we did share with you that we made a lot of new towers. All in all, I think, the narrative during that time was that we are making single tenancy towers, and also there was an overhang of, let's say, you know, further operator consolidation, which will take place as well. As we got into quarter one of this financial year and quarter two, if you start to see the results, I think our mix between, let's say, the new towers and co-locations have started to flow in the direction of co-locations or the tenancies as well. The tenancy ratio fall has been absolutely tapered off. Please remember that this package which is coming in as well. It is only the sentiment which has flowed in right now. If we were to actually look at three operator scenario in which three large operators, healthy operators are competing with each other, I think each one will have to chase the other one. Obviously, there exists gaps between the operator itself, and there are plenty of ready-to-use towers for us, which actually gives off a take-off strip for the newer operators or the operators who are doing the catching up as well. My take is as we see the operators gaining strength when it comes to the financial one and closing in their, you know, packages which they are actually trying to garner from and the funds as well, we will start to see CapEx infusion, and we should start to see the tenancy and the tenancy ratios going up. We have the right portfolio, the largest footprint as well available for this to go up. I think, what needs to be watched is how this package translates into healthy operators and the consequent healthy competition, as well. Got it. That's all from my side. Thanks so much. Thank you, Sanjesh. Thank you for taking my question, and best of luck. Thank you very much, Mr. Jain. The next question comes from Mr. Viral Shah from Credit Suisse, Mumbai. Mr. Shah, you may ask your question now. Sorry, we can't hear you. Mr. Shah, you may ask your question now. Hello? Viral, we can't hear you, Viral. Okay, let me come back. Hello? Viral, we can hear you. Hello. Please go ahead. Yeah. Sorry for this. I had three questions. Hello? No, Viral, please go ahead. We can hear you clearly. Yeah, sure. Yeah. First one is, if you can quantify what was the reversal of the other expenses during this quarter, the provisions that was mentioned initially. How much will come back from next quarter on a BAU basis? Yeah, I'll take that one, Viral. First of all, I think it's important to understand the other expense because obviously it's a mixed bag of several elements. There are particularly two or three elements in that mixed bag which really are not very consistent every quarter. One of them is, of course, the bad debt provisions, which you know, depending on the situation, we are either creating or reversing. The second one is also the municipal taxes and the property taxes that we get from the various municipal corporations and government departments and so on. I think because of this, the other expense is anyway, if you look at the history of last four or five quarters, it really shows a bit of a fluctuation. But pretty much I would say, we have reported pretty much half the run rate, what we should expect in a very, very normal quarter. Certainly, there are some provision reversals as I mentioned earlier, in this quarter because of which the other expenses is almost 67% or 68% lower year-on-year. But like I said, I mean, that's pretty much half the run rate. Okay. Thank you for this. The second question I had was with regards to the quantification of the exit penalties, basically, which will start tapering from the fourth quarter of this year. If you can quantify what would be the exit penalties versus INR 184 crores of this quarter in FY 2023. Say, either on a quarterly basis or just some roadmap around that. I think I did indicate that in the first question itself. I think pretty much we would expect somewhere in the range of about INR 30 crore or thereabout in quarter four. There would be a substantial tapering that we expect to see. Okay. This 70 will then continue for FY 2023 as well? No. There will be basically because these are part of several contracts. As and when the contracts come to end, we will see further tapering. The bulk of the tapering will be visible in quarter four, and then gradually further down. Okay. The last question is with regards to the renewal negotiations. I know you mentioned that the negotiations are still ongoing. If you can quantify the extent of the tenancies that we are talking about in terms of negotiation over the next 12 months. Where are the talks progressing? Because last time around, the question was with regards to basically doing a freeze in terms of the base rates for extension of this MSA. What is the premise of on which then the negotiations are going on? If you can give some color around that. Well, firstly, I did mention, Viral, around this topic earlier, that almost a third of our tenancies are coming in for renewal by end of March 2022. All I can comment and it won't be right on my part to give any color to these negotiations or even share the drift of those as well. All I can say is there is an engagement which is going on as well. I think, it won't be fair on my part to share any kind of a drift at the moment because as you would know, these negotiations are you know quite protracted and intense as well. Okay. Fair enough, sir. If I just, as a follow-up on this, have you seen any operator basically having the negotiations with our competitors, especially because now we have this renewal coming around, what is, if you can share anything around that? Let me put it this way, you know, I won't comment on what each operator is doing with our competitors as well. A good way for me to answer this question is where do we fit in all this as well? I think, I would repeat it, and I was trying to avoid that repetition here. Let me make you believe that we hold very good cards in this negotiation. Obviously, if you look at the overall picture of the negotiation, look at, and I think, you need to start to build this picture a little bit at a bigger scale. The operators will undergo or they will be participating in the spectrum auctions sooner than later. 5G is gonna be a very big priority, which, for the operators, very, very soon. Now, I'm not talking about how much CapEx will be required. I would actually like to point out that how many fronts an operator would like to open up when it comes to the network quality front as well. I think, that is to do with how your question of how operators are preparing for this negotiation. I think, taking tenancies from one tower company to the other, it's not easy, it's not cheap. It impacts the network quality and so on and so forth, as well. On the other hand, I would like to say that our track record on when it comes to these negotiations has been quite, good. We've managed to create this win-win situation, and I can go back to 2016 negotiations as well, where we shared with you that we got these extensions as well and gave away a portion back to the operators as well in a very transparent manner as well. I will not be too worried about what is going on between operators and competition. I think, it is the engagement which we sit with with our operators and how it closes for now. Obviously, we are keeping an eye on pretty much all these developments as we go into this negotiation. Okay. That's it from my side. Thank you. Thank you. Thank you very much, Mr. Shah. Participants who wish to ask questions may please press star one. The next question comes from Mr. Kunal Vora from BNP Paribas, Mumbai. Mr. Vora, you may ask your question now. Yeah. Thanks, sir. A couple of questions. First is on assuming that you move to fixed energy model, you mentioned one operator might do it like next quarter itself. What should we expect in terms of margins? You've seen the negative margins persisting for last six quarters now. Would the trajectory change as you move to fixed energy model or it will take some more time? Kunal, [audio distortion] question, it actually depends on how this thing closes and any model execution, I think, has its own dynamics as well. Getting into predicting what would be the impact of it, I think, it, I won't be able to give you any color on this as well. Moment we close it, I think, we should be able to give you where we would end up if at all, because it actually constitutes some forward inputs as well. Obviously, where we stand, I think, it would be a better position wherein we can actually pump in good CapEx and get energy reduction. Our ESG story also starts to take a much bigger shape as well, which is what we are keenly engaged with. Sure. That's helpful. On, secondly, on the tenancy renewals, you have 1/3 coming up by March 2022. When do you expect to close this negotiation? Would you like to say that the best case is getting what you're getting or is there a potential to get more? Look, I think, this is to do with what happens, let's say, in next two months. These two months our endeavor would be to close it way before the expiry. But it cannot come at a cost. I think, the way we are engaged, I'm hopeful that we should be able to close it before the expiry of pretty much all these contracts and share it with you post our board meeting in January. That's okay. Would you say that the best case is getting what you're getting now or is there a scope for any condition or any cost and discount? I know it's, there are the, negotiations are going on, but they shouldn't go any further. Sorry, could you repeat your question? Your voice is slightly messed up here. Sorry for that. I was just asking that, what will be the exit strategy? Is there a potential to sell [audio distortion]? Kunal, it's difficult to hear you. If you are using a headphone or headset, please remove that. Okay, okay. Yeah, I think [audio distortion]. No. Sorry, Kunal, it's unclear. I'll come back later. It's okay. Thank you. Yeah. Thank you very much, Mr. Vora. Participants who wish to ask questions may please press star one. At this moment, there are no further questions from participants. I will now hand over the call proceedings to Mr. Bimal Dayal for the final remarks. Thank you all for your interest in participating in this earnings call. Let me rephrase or even summarize what we said. Quarter two has been a good quarter for the industry. The telecom relief package has been the highlight. We believe the coming quarter will have a very good bearing from the fine lines and the detailing of this relief package, and we are eagerly looking forward to it as well. As on our quarterly performance, it has been robust and stable as well, which is seen in our financial results as well. We certainly hope to share our strategy and in a session with you all, as the overhang of any further consolidation is considerably reduced as well, which actually will focus on how we will actually get into growth in coming quarters and years to come as well. This is one of the exciting things which we certainly want to share with you sooner than later as well. With this in mind, all I would like to say is thank you for your patient listening and good luck to us. Thank you. Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. Thank you for connecting to audio conference service from Airtel and have a pleasant evening.