Welcome to the Indus Towers Limited first quarter ending, June 30th, 2023 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 terminated post an announcement. Present with us on the call today is the senior leadership team of Indus Towers, Mr. Prachur Sah, MD and CEO, Mr. Tejinder Kalra, COO, Mr. Vinod Rao, Head Business Controller, and Mr. Dheeraj Agarwal, Head Investor Relations. 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 risk that we face. I now hand over the call to our first speaker of the day, Mr. Prachur Sah. Thank you. Over to you, Mr. Sah. Good afternoon, everyone, and thank you, Vandana, and a very warm welcome to all the participants on the call. I'm pleased to present our business performance for the quarter ended June 2023. Joining me today are my colleagues, Mr. Tejinder Kalra, COO, Mr. Vinod Rao, Head Business Controller, and Mr. Dheeraj Agarwal, Head Investor Relations. The quarter gone by was especially satisfying for us on 2 fronts. Firstly, we continue to see good demand from one of our major customers, particularly in rural areas, resulting in the highest average additions in a quarter for Indus Towers. Secondly, the collection level from one of our customers seen in fourth quarter, sustained in first quarter as well. Before I dive into specific areas, I would like to take a moment to acknowledge the invaluable contribution of our field forces, who continue to work tirelessly to help Indus Towers accomplish its goal of enabling nationwide connectivity. Our teams on the ground ensured connectivity in Gujarat, Northeast region, Uttar Pradesh, and Bihar. Amid the Biparjoy Cyclone and harsh weather conditions, including flash floods witnessed in these areas. The team also managed to install sites in the tough terrain of Uttarakhand and Gurez and Siachen, located to the north of Jammu and Kashmir. This is a testament to our commitment to work with our customers to bridge the digital divide. On the industry front, the government remains dedicated to accelerating the rollout of telecom infrastructure across the country and is taking necessary measures to ease the process. These include a composite billing scheme for multiple power connections, the option of applying for a power connection for telecom infrastructure through GatiShakti Sanchar Portal, and mapping of different ministries to the Gati Shakti Portal to apply for Right of Way. These proactive measures by the government reflects its commitment towards fostering a conducive environment for business growth in the telecom sector. Moving on to the 5G, the top two operators continue to roll out 5G rapidly. Having launched 5G services in more than 3,500 cities and towns, with Pan-India urban coverage expected to be completed this year. Around 275,000 5G-based stations or BTS, have been deployed by the operators across the country, with average weekly run rate of deployment increasing significantly from approximately 7,000 in March to almost 12,000 in June. Aggressive rollouts by operators have translated into increased traction in our loading revenues. We expect to see good demand for new sites when the 5G network achieves a certain penetration level and creates the need for more capacity. As per Ericsson mobile, 5G subscriptions have reached 1.1 billion, with 125 million additions seen in the March quarter alone. Total subscriptions are now expected to reach 5 billion by the end of 2028, with IT subscriptions in India expected to reach 700 million mark by 2028, with a penetration of about 57% as per the report. Data consumption in the country remains robust, driven by the rapid uptake of 5G and a continued upgrade from 2G to 4G. The average data consumed per user per month across the top three operators, grew 14% year-on-year to 21.2 GB for the quarter ending March 2022. The total data consumed grew by 21% year-on-year in the March quarter. With the rising data consumption and the rapid integration of 5G, the demand for passive telecom infrastructure is expected to rise significantly to add more capacity, and we possess the capability to effectively cater to this increasing demand. In terms of our operational performance, I am pleased to report that we have recorded our highest ever tower addition in a quarter. We continued the tower addition momentum seen in fourth quarter, underpinned by strong demand from our customers. During first quarter, we had net additions of 5,410 micro towers and 5,048 corresponding co-locations. Our total micro towers and co-locations at the end of first quarter, were 198,284 and 347,879, respectively, each growing by 6.3% and 3.4% on year-on-year basis. Our connectivity ratio remains industry leading at 1.75. We continue to witness good demand for linear travel, primarily for densification purposes in urban areas. Our linear travel additions stood at 936 in first quarter, compared to 1,235 in fourth quarter. Including linear towers, our net co-location additions were at 5,984 in first quarter, against 4,631 in fourth quarter. Taking a cue from our operating performance, I would like to lay out our four key strategic priorities where we have been driving a sharp focus. These are market share, cost efficiency, network uptime, and sustainability. Let me spend some time to give you an update on actions taken and progress made on each of these priorities. Firstly, regarding market share, we have significantly increased our share in business of our major customer. A total addition of 10,615 co-locations over the last 2 quarters is a testimony to the excellent work done by the team. We have formed a dedicated team to smoothen the deployment process and optimize delivery time to a real-time tracking mechanism and logistics alignment. By the way of digital interventions, we have pan-India partner and supplier ecosystem. Close coordination with customers to align with their requirements. We have partnered our competitiveness, helping us secure more wins. Secondly, on cost efficiency, we are working on optimizing both operating and capital expenses. Energy makes up for more than half of our OpEx, and diesel costs account for a large part of it. Our multiple initiatives have led an 8% year-on-year reduction in diesel consumption in first quarter, despite increasing load from installation of 5G equipment. These initiatives include augmenting our energy storage solutions. We added solar and piped natural gas energy solutions on our tower sites during the quarter, and also converted our sites from indoor to outdoor, which further reduced diesel consumption. For sites with prolonged electricity outage, we are working with a technology partner to pilot an aluminum air-based energy solution to replace diesel. There are various measures under implementation to improve the overall CapEx productivity, such as tower design standardization, automation in procurement process for better cost control, and use of artificial intelligence and machine learning to enhance life cycle of equipment. Thirdly, on network uptime, which is very critical for our customers. We continue to maintain a very high uptime and delivered an uptime of 99.9% in first quarter FY24. Please note that the quarter was marked by severe national calamities, such as Biparjoy cyclone in Gujarat, and heavy rains and floods in areas of Northeast, Bihar, and Uttar Pradesh, also. Despite these challenges, our teams on the ground ensured a high level of uptime in these areas. We are embarking on digital transformation of our network by connecting all our towers to the largest real-time telemetry data system. It will make our monitoring and action planning more robust and faster, helping us further improve our industry-leading network uptime. The system will also facilitate auto and pulse-healing measures in the network, which will improve the productivity of field staff and optimize the operating costs. Now, moving to sustainability, which stands as a key priority for the organization. We are guided by our ESG vision and launched Zero Goal Hai or Zero is the Target campaign during the quarter, with the aim of achieving zero emissions, zero harm, zero waste, zero bias, and zero tolerance to non-compliance. I have already highlighted our energy initiatives to reduce diesel consumption and adopt green sources of energy, which will drive control over scope one and scope two emissions. We have recently concluded inventorization of our scope three emissions, which will help us target key sources of emissions in our value chain. Our gender diversity inched up from 6.3 to 6.5% over the quarter, aided by focused hiring programs and initiatives taken on forcing and including both culture. However, a lot more work needs to be done here, and we are currently focused to do the same. Regarding safety of our workforce, we are bringing in technological interventions, such as introduction of virtual reality-based safety training modules and software applications for correction of unsafe driving behavior. We have assessed all our major suppliers and partners on key ESG parameters. We are now engaging with them to drive more focus on the identified ESG opportunities to make our sourcing more sustainable. Our efforts towards ESG are being recognized as we were adjudged The Best Emerging Company of the Year at the prestigious Transformation Performance Forums. Indus also ranked 31st amongst 200 companies at BW Sustainable World Conclave. I would now request Vinod to take you through our financial performance for the quarter ended June 30, 2023, and I look forward to your questions. Over to you, Vinod, and thank you. Thank you, Prachur, good afternoon, everyone. I'm pleased to share the financial results for the quarter ended 30th June 2023. Reiterating our strong operational performance, this quarter marked the highest ever tower additions in a quarter for Indus. As Prachur said, we added a total of 5,984 co-locations, including those on linear towers, driven by network expansion by our major customer and interventions taken by us to optimize the deployment time. Moving on to financial performance for this quarter. Starting with revenues, our reported gross revenue was INR 70.8 billion, growing by 2.6% year-on-year. Core revenue from rental increased by 2.7% year-on-year to INR 43.3 billion, aided by strong tower additions and loading from 5G rollouts. Please note that the first quarter FY24 had an impact of non-recognition of revenue equalization assets for one of our major customers. On a quarter-on-quarter basis, total reported gross revenue and core revenue from rentals grew by 4.8% and 2.0%, respectively. Moving to profitability, the reported EBITDA grew by 15.3% year-on-year and 2% on a quarter-on-quarter basis to INR 35.1 billion. EBITDA margin was up at 16 percentage points year-on-year and down 1.4 percentage points quarter-on-quarter to 49.7%. Energy margin for lower at -3% in this quarter, due to seasonality as our diesel consumption increases during this period. As Prachur had highlighted earlier, we are taking several initiatives to reduce our diesel consumption, which should help minimize our energy losses. Our reported PAT, profit after tax, stood at INR 13.5 billion, growing 182% on a year-on-year basis, declining 3.6% on a quarter-on-quarter basis. The significant increase in depreciation and lower other income impacted our net profit. Our reported pre-tax return on capital employed and post-tax return on equity for the rolling 12 months were at 13.8% each. Moving on to cash flows. The free cash flow for the quarter was INR 58 million, as our CapEx increased substantially to INR 22 billion. We have invested a large sum of capital to capture the growth opportunity rising, arising from the accelerated rollouts by our customers. This is critical to our business growth. A timely and swift response by Indus will generate long-term value to the shareholders. Our receivables increased to about INR 4.3 billion during this quarter, as our customers are seeking clarity on certain bills, and we expect to resolve it soon. I'm happy to report that the collections from one of our customers are now stabilizing at close to the invoice amount after the shortfall that we witnessed in 2022. Regarding this customer's past dues, we are in constant dialogue with the customer for clearance of the same. We also continue to closely monitor any developments from the customer's fundraise plans. To sum up, we are pleased to have delivered a solid operational performance in first quarter, coupled with the strides we are making in each of our strategic priorities. Steady collections have helped our financial performance, while the accelerated 5G rollouts and rural expansion by one of our customers will serve as significant levers for our growth. I would now request the moderator to open the floor for Q&A. Thank you very much, sir. We will now begin the question and answer interactive session for all the participants who are connected to the audio conference service from Aiden. Due to time constraints, we would request if you could limit the number of questions to 2 to enable more participation. Management will take only 2 questions per participant to ensure maximum participation. Participants who wish to ask questions may please press star one on their customer enable telecom keypad. On pressing star one, participants will get a chance to present their questions on a first in line basis. To ask a question, participants may please press star one now. The first question comes from Mr. Kunal Vora, from BNP Paribas, Mumbai. Mr. Vora, you may ask your question now. Thanks for the opportunity, and congrats for a good quarter. I just wanted to get some info on the growth CapEx of INR 20 billion. How much of that would be on macro towers, linear towers, loading, and any other initiatives? If you can help us understand this better, and how do you see this going forward? That's my question. I think before... Kunal, thanks for the question. I think our CapEx is typically distributed between towers, 5G rollouts, replacement of the tenants, and energy CapEx. These are the general distribution of CapEx. Kunal, if you want to comment anything on the- Yeah, sure. Kunal, some high-level numbers for you on the breakup of the INR 2,200 crore of CapEx. Around INR 1,400 of them is for the rollouts, the macro rollouts, and the rest are split across the other categories, which, which Prachur just mentioned. Okay. Okay. The cost per macro tower, how would that be now? Like you added 5,000 towers, so it used to cost about INR 25 lakh. Where is it now? About INR 15-20 lakh, if you can give a number, which will help us, like, project the numbers better. Yeah, Kunal, I think it's, it stays in the same range. Okay. Okay, okay. On the linear towers, can you share the. Thanks for sharing the details which you have. If you can share the cost per tower margin, like, margin compared to the macro towers, and the any details which you can provide incrementally on the linear towers? Typically, Kunal, linear towers are definitely lower on CapEx, right? We have a very high double-digit margins on the linear towers. ... will be significantly lower. It will be like, say, compared to the close to INR 20 lakhs, which you have on macro, will it be like, say, INR 3 lakhs, INR 4 lakhs, INR 5 lakhs, or will it be like somewhere like- For the sake of, you know, I would not be very specific, but it is significantly lower. Okay. Okay. Just one last question, if I can, which is like, how should we look at the average revenue for co-location going forward? If it's down marginally year-on-year, is it largely because of the rental renegotiation, and should we expect it to increase going forward, led by escalation, loading, and contribution from linear towers? I believe that's probably impacted by the ARIA. Otherwise, I think, original revenue for co-location should remain in the ballpark where it is. Sorry, I could not hear this clearly. Kunal, what you were saying was the ERCP is impacted this quarter by the RER, the revenue utilization impact, which I talked about in my opening session. Other than that, it should be pretty pretty same quarter-on-quarter. Should we be getting in some improvements because of, like, annual 2.5% escalation? You're having 5G loading, also linear towers as their revenue increase, but towers don't get counted. Should we be expecting an increase going forward or a flattish number? So, Kunal, I think, I think it's from a forward-looking point of view, I think it, it has many, many factors, like what kind of towers, what kind of mix we are talking about. I think it, it won't be, you know, you're able to assume one or the other, but the mix, depending on the mix, I would expect, because primarily we'll be doing the single tenancy towers as of now. I think, the numbers should stay in the region, but it also depend on the mix that we deploy going forward. Thanks. Thanks. Thanks. That's it from my side. I'll come back in the queue. Thank you very much, Mr. Vora. The next question comes from Mr. Aditya Suresh from Macquarie, Mumbai. Mr. Suresh, you may ask your question now. Thank you. I think it got cut. The next question comes from Mr. Sanjay Jain, ICICI Securities, Mumbai. Mr. Jain, you may ask your question now. Good afternoon, sir. Thanks for taking my question. few from my side. First of the 5G, you did mention that we have grown from 7,000 rollout in the month of March to 12,000 rollout, and we have reached 250,000 BTS. Is this the right data point? Just wanted to confirm that. I think, first of all, let me clarify. The 7,000-12,000 is the deployment by the operators, right? I think this is a total deployment of the industry rollout. 275 [Crosstalk] Industry. Right. 275,000 is also an industry number as such, right? It's not directly correlated to size, because, you know, I, if you want to tell me, what's the number of the industry? Sanjay Jain, this is Tejinder Kalra. I think, first of all, as the 2 clarified, 7,000-12,000, the industry is fast-tracking its deployment of 5G over the, over the network. That is the pace the industry is doing overall. Between our, you know, our various customers put together and the full portfolio of towers that they have from all the locals put together, that's the pace and the overall volume of 5G BTSs that they have installed. If one were to look at out of the 275 BTSs, what share would fall on Indus Towers sites, I would say roughly a little over one-third would be sitting on, you know, Indus sites from this overall base that we are talking about here. From the market share perspective, for the 5G, will it be lower for us, when you compare to 4G? One of the operators has mentioned that they have rolled out 150,000 BTS, and that covers 65% scope of their immediate coverage. That means, we are running closer to the first phase of completion of 5G rollout. How do you assess the market share for Indus Towers for the 5G? See, eventually, we have seen the 4G getting spread to almost 100% of the towers. It's a matter of time when 5G will go to 100%. We don't see 5G getting selective, but I think it may take 2-3 years when that full scope rollout of 5G would happen. One of the operators has 2 frequencies and therefore 2 BTSs per site that they need to put up. If they are talking of higher number of BTSs, it does not mean they are covering higher number of towers, because you can divide that by 2, and that is the number of sites that they are probably covering up. If you look at overall from an industry, industry perspective, my estimation is roughly about 25%-30% of the sites are yet covered by 5G, even shared lower maybe. That's where we are at an industry level, as to my estimation. Our market share will be reflected on the tower market share. Yeah. At the end of the day. Correct. Fair enough. From the loading charges, can you help us understand, putting a full-blown, standalone 5G versus non-standalone 5G, what will be the differential in terms of the rentals which we charge to the operator? Sanjay, hi, this is Vinod. The rentals that we charge to the operator are, is a function of the, of the equipment that they deploy, the power and the space and the weight. Standalone or non-standalone is the operator's technology preference. For us, it is a function of these three, in terms of the loading revenue that we, we generate. Fair enough. Fair enough. Just one, one last on the CapEx side. what is the payback period right now we are seeing for both macro as well as the loading that we are putting on the 5G side? Sanjay, from a payback perspective, and what we need to understand is the operators come with us on a tenancy for a 10-year duration. Mm-hmm. I mean, as you are already aware, most of the, or a significant amount of the portfolio has already got renewed last year. Which means we are seeing another 10 years on those, on those tenancy. Right? Now we are getting loading on them. That loading revenue is going to come with us, come with us for the next 9 years or 8 years, as the case may be. I mean, it's, it's payback accretive from a, from a very early stage, from a loading perspective. No, that's fair enough. What will be the payback, assuming that it's an incremental cost over incremental revenue, right? That's one. Number two, for the fresh macro tower, the single tenancy towers we are putting, what's the payback period for that? Sanjay, I mean, just to, just to clarify, I think typically for macro towers, we are at a high single digit IRRs on a single tenancy basis without any loading. For the linear towers, it's probably high double digits. That's the IRR that we operate in, and as the loading comes in, the IRR further improves, or when the second tenancy comes, comes, the IRR improves. That's the number that we are currently operating. Fair enough, sir. Any update of the dividend you want to share? We haven't announced any dividend last fiscal year. What's the general thought process on the dividend payout now? Yeah. Considering that we are into an elevated, CapEx mode as well for probably next 1 to 1.5 year. Yeah, Sanjay, hi. As, as you are aware, our dividend policy requires us to distribute 100% of the free cash to the shareholders. I mean, at this point in time, it is very difficult to, for us to predict the free cash flow for the whole year, given the number of moving parts. As you rightly said, it's CapEx on the one side, but on the other side is also the visibility of collections from a major customer and the funding plan of that customer. I mean, unless we sort of get, get a grip on those factors, which are extraneous to us, it's difficult for us to sort of think of dividends at this point in time. Once we get clarity on some of these, we'll be able to come back to the board and then beyond in terms of our, our plans for dividend. That's clear. Thank you very much for answering all my questions, and best of luck for the coming quarters. Thank you very much, Mr. Jain. The next question comes from Mr. Aditya Suresh from Macquarie in Mumbai. Mr. Suresh, you may ask your question now. Hi, thank you. Am I audible now? Yes. Okay, thank you. I had a question on dividend, but, but you just answered that. The second question I actually had was on the, on the recovery, your energy reinvest, reinvestment. That is 3% in this quarter, 2% last quarter, 1% the previous quarter. There seems to be an increase here. Any color you can provide here, on this? Yeah, Aditya, hi. One of the major reason, reason, as we mentioned at the outset, is, is really the seasonality between the transition between the winter period and the summer period. So this, this is usually a high consumption, high diesel consumption period. Plus, as Prachur already mentioned, we've had a couple of weather disturbances during the quarter, which has, I would say, typically energy costs up higher, and, and to that extent, some amount of non-recoverability there. We have, we have, and Prachur has also talked upon this, that we are taking multiple initiatives to reduce our diesel consumption, as highlighted, which, going forward, will help us reduce the losses. In terms of accounts receivable, there's been a mild increase here, this quarter. Any color on this and pipe back to your larger tenants? Yes, Aditya. Yes, you are right. There's a minor increase of around INR 4 billion-INR 5 billion in the AR, accounts receivable for this quarter. It's a timing issue, as some of our, one of our customers is sort of looking at our bills and expecting it to get unwound in this quarter. In fact, this week, I can say a significant portion of that has already unwound itself, and we've got the cash in our bank. Thank you. Thank you very much, Mr. Suresh. Participants who wish to ask questions may please press star one on their custom enable telephone keypad. On pressing star one, participants will get a chance to present their questions on a first in line basis. To ask a question, participant may please press star one now. The next question comes from Mr. Navin Matta, from Ambit Capital, Mumbai. Mr. Matta, you may ask your question now. Hi, this is Vivekanand from Ambit. I had a question related to the energy margins. Just to understand better, I'm sure you said that this quarter, you saw 8% lower diesel consumption despite the higher 5G load. In that light, if I look at the margins, the energy margins on a year-on-year basis, they are more adverse compared to last year. What has changed on the energy side that in the last 4 quarters, the energy spread has widened? I'm considering first quarter FY23 as a comparison just for seasonality. I think, Vivekanand, if I'm not wrong, you're asking for that compared to first quarter of FY23. I believe in first quarter of FY23, there was a one-off that was impacting and giving an impression. If I correct it, it was probably actually higher negative than what was in first quarter of this year, right? It was close to 3.8 negative in last year. Actually, the energy costs are on the improving trend, given that we are reducing the diesel. Of course, we want the pace to be faster. All of us want the pace to be faster, but just to correct, last year, because of the one-off, it appears. If you correct for it, it's -3.8 last year. Do you have anything else? No, sir. That's it. Okay. That's it. Okay. Right. That's, that's very clear. Thank you for clarifying. Second question is on the CapEx outlook. I understand that you, you have seen increased demand from one of your large customers, especially for rollout sites in rural markets. Is there, if based on the plan that the operator may have shared with you, how should one think about the CapEx for fiscal 2024, considering that perhaps the rural rollout appears to be the single biggest factor for your CapEx to be so high? I, I think, I think the demand for new towers from the rural expansion and densification in urban areas still seems to be robust. I think, we expect this demand momentum to remain healthy, at least, in this year and probably extending the first quarter of next year. I think, it remains based on rural expansion, densification in urban areas, and 5G rollouts, that will probably drive the CapEx for, for Indus. Okay. So my last question is on the market share that we may now have of the, of, of Airtel. I, I think a couple of quarters ago, this was discussed quite a bit on with respect to Indus' market share. You, you mentioned in your opening comments that your market share has gone up. Could you help us understand where it was, say, a year ago and where it is now? Okay. I, I mean, all I can talk about is the numbers that I have right now. As of now, we have rolled out close to 605,984 towers for all our customers combined, which include urban, rural, right? I mean, in my view, the market share has increased substantially, and I think we intend to keep it that way with an operational performance. That's what I can comment on. I believe- Great. Thank you. Most of the market. Okay, that's, that's clear. Thank you. All the best. Thank you very much, Mr. Matta. The next question comes from Mr. Sonal, from Pescient Capital, India. Mr. Sonal, you may ask your question now. Hi, this is Sonal. I have a question with regard to your debt down at the tech levels. If you could give me a guidance around what is the plan for the company to dial the debt, what are the comfortable levels over the course of next 2 or 3 years? That will be helpful. Thank you. Yeah, hi, this is Vinod here. As far as the debt is concerned, as you would have noticed, our net debt remains relatively flat for the last couple of quarters. It's around INR 5,000 crore. Ballpark is the number which we are comfortable at. Having said that, there is some headroom in case we need to sort of borrow more to help us, you know, capture these opportunities that are there in the market. For now, we sort of look at this number as a guiding light for us in terms of where we want to see our debt levels. You got it, sir. This is the way you want to operate in, basically. Right. Sir, I had a second question on the sharing factor that you see post the 5G rollout. This is again a 2-3 year kind of outsourcing perspective. If you could just give broadly, like, what are the numbers you're talking about, broader reach, that will be helpful. If you could. I mean, if I understand your correct, question correctly, you're asking about a sharing factor? Yeah. Actually, I, I mean, in my view, 5G and sharing factor are not correlated, because I think if, if whoever is on the tower wants to roll out the 5G, I think not impact the sharing factor. That the newer towers that we are currently rolling out are single tenancy towers. That will potentially impact our sharing ratio is affected from 1.78, we went to 1.75. Primarily driven by the roll out of the new towers, not so much the 5G. Got it. At a mandate level, sir, if the sharing factor mandate level will go, go down, will, the unit level revenue go up? If I were to just talk about, let's say, per on a per operator basis, if you could give that as a, as a guidance. I'm not sure that's the right reference. Yeah. won't be able to comment on that. Okay. You know, we, ARPT, what we measure is the average revenue per tenant. I mean, that's, that's the number which we are reporting, and that number is a function, as you rightly said, of some of the 5G revenue that we will get. But, I mean, we don't... I'm probably not even able to get the drift of your question in terms of what you're probably driving at. The ARPT will continue to grow, go up as in when we get more 5G revenue, and that's a percentage, it's a small percentage, because currently it is loading revenue. That's how the ARPT will move. You think this will go marginal? Yeah, I understand. I'll check this off. That's it. Okay. Thank you. Thank you very much, Mr. Sonal. Participants who wish to ask questions, may please press star one on their customer mobile telephone keypad. On pressing star one, participants will get a chance to present their question on a first in line basis. To ask a question, participants may please press star one now. We do have a follow-up question from Mr. Sanjay Jain, from ICICI Securities, Mumbai. Mr. Jain, you may ask your question now. Thank you. Thanks for this follow-up question. Just one thing. Wanted to understand, do we have any plan on the battery side? We are one of the largest consumer of the batteries. There's a growing demand for batteries, replacement batteries, because of the adoption of EV. Do we plan to do anything around it to see that the assets can be better supplied? Is there any thought process there? I know we have largely been using lead-acid, but this will also help us in terms of transitioning to a more better quality batteries. Any thought there? Yes, I think the battery is a very important topic. I think we have a full dedicated technology team working on that one. I think currently we are watching, as you said, lead-acid batteries. We are current looking at lithium-ion and other new solutions, as I mentioned, the aluminum air solution as well. Absolutely, I think battery is a very important component of our network. We have actually laid out a very clear strategy on how we want to operate and make that as a part of a very important ecosystem for us in operating, especially as we reduce the diesel cost across our operations. We are going into specifics. Yes, lead-acid, lithium-ion, and any new technology on the battery side will remain forefront in our opportunities, and we are actively looking at partners to participate, where they can come and participate with us and work with us in this, this area. Is this technology limited for the, internal consumption, or we want to, build a business model around it? Sanjay, we'll look at the opportunity. As of now, I can tell you that currently it's more focused on the tower side, and as more opportunities come up, which is more feasible, we'll be happy to upgrade you. Got it. That's, that's it from my side. Thank you. Thank you very much, Mr. Jain. We do have another follow-up question from Mr. Kunal Vora from BNP Paribas, Mumbai. Mr. Vora, you may ask your question now. Thanks for the follow-up. Wanted to check on the receivables provision which you created. Not a very large amount. At the same time, why it is created? Is it a disputed payment? The why is the provision connected to quarter? Yeah, Kunal, this is Vinod. I mean, there are two things you are probably asking at the same time. We have certain provisions for disputes, and there's a general provision for doubtful debts that gets created. Provision for doubtful debts is a function of the, of the number of days of overdue. There's not really anything specific concerned with the disputes, why we have sort of created this provision this quarter. The provision this quarter is fairly minuscule in terms of the hit to the PNL. Second is on the energy margin. Is it a timing issue? Last year, if I recall it right, you also had a large reversal of energy losses, and you had reported some gains. Should we expect something similar going forward, or this is one-off? It was, it was a one-off, last year. Last time it was a one-off, but last time I think, was also a reversal of accumulated losses. It's not like it was something bad, like, you had losses for many quarters, and, like, finally you managed to get some money from the customers, and, there was, there was some reversal. Is that something which we can expect on ongoing basis, or, that is clearly a one-off, not something we should be extrapolating? Yeah. Kunal, that was clearly a one-off. I mean, there were certain settlements done with the customers then. As a result, we recognized the one-off last year. We don't see that continuing forever. Okay. Finally, on the, like, you had allowed, like, some 9% exits annually to the customers, without any penalty. Is it fair to assume that, like, going forward, you will not have any meaningful exit penalty revenue because you've come up obviously to ministry levels right now. Going forward, there should not be any exit penalty revenue? Yeah, that's right, Kunal Vora. Okay. Okay. That's it for me. Thank you, sir. Thank you very much, Mr. Vora. The next question comes from Mr. Arun Prasad from Avendus Spark. Mr. Prasad, you may ask your question now. Thank you for the opportunity. Lastly, I wanted to understand, given that, we are, we are now mostly rolling out in the rural side, what will be the difference in the tariffs between, say, in a tower in a rural site and versus, versus, versus our existing portfolio? This will obviously pull down the sharing revenue operator number, which is kind of not helping us in figuring out what is the impact of loading, loading revenues. Arun, I'm not very clear of the, the question, because loading revenue is irrespective of the location. It depends on what, loading comes from that particular tower. What I'm asking is, loading revenue should have, loading revenue should have already had some kind of impact on the sharing revenue for operator health. It, it finally goes on impact the sharing revenue for operator, but we don't see that in the numbers. I'm wondering, is there any because of the mix related stuff, this is not impact, this is not reflecting in the numbers. No. Arun, I, I can only say is, depending on the tower mix, depending on the kind of tower we deploy, in, in, you know, and which is not always the... In general, there is a movement towards a certain kind of tower that we are deploying in rural and even in some parts of the urban. That will drive our revenue. In fact, you know, I believe the loading revenue would happen on each, depending on the timing, when the 5G comes through, it will happen eventually on the rural as well. You may probably not be seeing it because of the ARIA impact, ARIA impact, last year. Otherwise, I think we are seeing, from our point of view, if you correct for ARIA, we are seeing the growth in the ARP as well. You know. Yeah, that's right. Yeah, that's right. I think we, Arun, we mentioned it at the outset that we had a correction taken from second quarter onwards in terms of the ARIA for one customer. That is the impact from a downside, you will see on a year-on-year perspective in our ARIA. Okay. Our most of the contracts are now replaced. Last year, I think we did only around, I think 1/3 of the contracts. The remaining 2/3 are also now replaced. Is the reason why it's not reflecting? It's not, I mean, it doesn't happen, you know, like, over 1 year or 1.5 years. Significant part of the portfolio was up for renewal last year, which got done, and now they're sort of spread over the next, including FY24. They're spread over the next 2 years, Arun. Okay. What percentage of the contracts are coming up for renewal this year and next year? Ballpark, it's around 10%, Arun. 10% this year? 10% this year and 10% next year, is it right? Ballpark. Okay, understood. Okay, I'll, I'll, I'll reconsider the numbers, offline. Thank you. Thank you. Thank you very much, Mr. Prasad. Due to time constraints, I would like to hand over the call proceedings to Mr. Prachur Sah, for the final remarks. Thanks a lot, Kunal Vora. Thanks, everyone, for the questions. In overall, in summary, we are very pleased to have built upon our robust operation performance of fourth quarter and delivered significantly to our customers with network expansion in 2023. We continue to make progress on each of our key strategic priorities, which are critical to our growth, competitiveness and customer satisfaction over the long run. One of our major customers to rural expansion and swift roll out of 5G by operators are underpinning the positive momentum. We are excited to facilitate our customers in this next leg of growth in a sustainable and inclusive manner. I want to again thank you all for joining the call. Have a good day. Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. 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