Suyog Telematics Ltd Q1 FY26 Earnings Analysis

- Suyog Telematics plans to roll out 10,000 towers over the next two financial years, adding 5,000 towers each year in FY25 and FY26. - They have secured sufficient business from Vodafone, Airtel, Jio, and BSNL to achieve this target. - The company aims to significantly expand its FTTH and fiber verticals in the next 2-3 years, with recent success in winning a major MTNL fiber tender in Mumbai, potentially adding 500,000 sites. - There is a strong expected increase in business from BSNL due to it becoming a preferred partner, with BSNL transferring sites from underperforming IP companies to Suyog. - Growth from Vodafone and BSNL tenancies is expected to boost revenue in coming quarters. - The company expects revenue impact from new tower additions and tenancies to reflect fully in upcoming quarters as rollouts complete and billing commences.

- The company plans a significant CapEx of INR 500 crore in the coming year to support growth and rollout activities. - They are targeting to roll out 8,000 towers with 10,000 tenancies, expecting strong tenancy additions from BSNL (5,000-6,000) and Vodafone (around 4,000). - Margins are expected to be sustainable; PAT margin improved by 275 bps to around 18%, excluding ESOP impact. - EBITDA margin excluding ESOP impact increased robustly to 71.4%, indicating strong operating profitability. - Other income reduction due to one-time interest income ending, but core business profitability remains stable. - Cash flow has improved significantly, which supports better rollout and operational expansion. - The company expects continued margin maintenance (32%-35% net profit) and improved EBITDA in coming quarters. - No major one-offs like ESOP hit expected in the current year, implying stable profit growth.

- Planned CapEx of INR 500 crore for the coming financial year. - INR 100 crore successfully raised from banks (Axis Bank and ICICI Bank). - INR 150 crore will come from internal accruals. - Additional INR 50 crore expected from preferential issue and ESOP. - Remaining INR 200 crore is being actively raised. - Major CapEx occurred in Q3; Q4 CapEx was around INR 4-5 crore. - Around INR 50 crore in Work-In-Progress (WIP) CapEx expected to capitalize in Q1 or Q2. - Acquisition of Lotus completed on March 31, adding revenue and sites, strengthening presence in Mumbai and Delhi. - Plans to add 5,000 towers this financial year and another 5,000 towers next year. - Focus on FTTH and fiber vertical expansion, with tenders like MTNL fiber in Mumbai.

- The company has planned INR 500 crore CapEx for the coming year. - So far, INR 100 crore debt has been raised from banks: INR 50 crore from Axis Bank (March) and INR 20 crore from ICICI Bank, with INR 30 crore expected in the April quarter. - They still have a shortage of INR 250 crore for CapEx. - Of the shortage, around INR 50 crore is expected from preferential allotments and ESOP. - The balance INR 200 crore is still being sought through fundraising efforts. - ESOP exercises are expected next year, with 5 lakh shares pending warrant conversion likely around June or July. - No big one-off expenses like ESOP are expected this financial year. - Fundraising updates will be shared when positive news is available. In summary, the company is actively raising debt and equity to fund expansion but still seeking INR 200 crore.

- The company is confident of achieving a rollout of 10,000 towers over the next two financial years, adding 5,000 towers each year. - They have secured enough business from Vodafone, Airtel, Jio, and BSNL to meet this target. - Recently awarded the L1 tender for MTNL fiber in Mumbai, expected to add 500,000 sites. - BSNL has designated Suyog as a preferred partner, transferring non-performing IP company sites to Suyog, expecting a significant jump in BSNL-related business soon. - The Lotus acquisition adds approximately INR 15-16 crores in revenue and 120 sites with 140 tenancies, expected to grow by 50% in the coming quarter. - Current backlog includes unbilled revenue pending billing due to site integration or PO-related issues, amounting to around INR 24 crores. Overall, the company has a strong and growing order book with major telecom operators and government contracts supporting its expansion plans.