Suyog Telematics Ltd Q4 FY25 Earnings Analysis

- Targeting 10,000 tenancies by FY26 March exit, combining FY25 spillover and FY26 rollout. - BSNL tenancy expected to reach 2,000–2,500 by end of FY26. - Revenue to grow as billing catch-up completes; majority of Q3 revenue impact expected from next quarter onwards. - New small cell and macro tower rollouts to continue aggressively with focus on government-backed operators and FTTH deployment. - Vodafone and BSNL aggressively rolling out, with BSNL having a ₹6,000 crore approval for rollout expansion, expected to boost business. - Acquisition strategy to strengthen Delhi presence and tenancy, increasing revenue potential. - Expect BSNL contribution to revenue to grow from current 0.4%–0.5% to ~15% by FY26. - Anticipated revenue growth driven by steady increase in tenancy and billing stabilization over coming quarters.

- Suyog Telematics remains confident of meeting FY '26 target of 10,000 tenancies, despite some FY '25 spillover, indicating strong revenue growth ahead. - EBITDA margins are stable around 69.9% for Q3 FY25, with management targeting sustainable margins close to previous quarters (~73% adjusted). - Net profit margin remains strong at approximately 35%, with Q3 net profit of ₹172 million and YTD of ₹543 million. - Revenue for Q3 FY25 was ₹488 million; nine months revenue stood at ₹1,425 million with expectations to grow as billing delays normalize. - Earnings per share (EPS) continues to be strong due to disciplined cost management and operational efficiencies. - BSNL tenancy growth expected to contribute ~15% of total revenue by FY '26, boosting earnings. - Planned CapEx and debt-funded tower rollouts (1,200 new towers) support future revenue and profit growth. - Promoter committed to 100% fund infusion for growth, supporting organic and inorganic expansion.

- CapEx incurred till date on installed towers is ₹100+ crores. - Planned CapEx for the last quarter of FY25 is around ₹50 crores for 500+ sites. - For reaching the long-term target of 15,000 tenancies (an additional 10,000 from FY24 base), planned CapEx is around ₹800 crores (not ₹1,000 crores). - For 500 new towers, estimated CapEx is ₹50 crores. - Funding plans include multiple routes: bank debt (₹100 crores planned), internal accruals, promoter infusion, and preferential equity raising at an appropriate time. - Debt is considered a stopgap arrangement; promoter committed to 100% fund infusion. - Potential acquisition delays may push some inorganic growth, with priority given to organic rollout. - BSNL’s aggressive rollout backed by ₹6,000 crore government approval supports growth demand. - Future CapEx is aligned with aggressive rollout plans for macro towers, small cells, and fiber.

- Suyog Telematics plans to raise around ₹100 crore debt, primarily as a stopgap arrangement to fund CapEx for adding approximately 1,200 new towers by March or June 2025. - The company is negotiating with bankers like HDFC and Axis Bank for this debt facility, aiming to close it imminently (around next month from Feb 2025). - Internal accruals will also be used alongside debt to fund new tower additions in the near term. - The company has withdrawn its earlier announced preferential equity issue due to unfavorable market conditions and intends to wait for an appropriate time to raise equity funds. - Promoters are committed to infusing funds as required for growth. - Alternative fundraising routes are being explored in case of continued adverse market conditions. - Overall, equity fundraising is deferred until market conditions improve, while debt is being used to support near-term growth and CapEx needs.

- Current order book is strong and actually higher than the number shown in the presentation. - The company has crossed 1,800+ tenancy up to Q3 FY25. - Targets include around 3,000 macro sites plus 500 for MTNL in Mumbai and 1,000+ small cells for FY25. - The 10,000 tenancy target by FY26 exit remains intact despite some spillover from FY25. - Rollouts with Vodafone and BSNL are increasing, with Vodafone planning around 10,000 towers every quarter. - There are 455 sites ready but yet to be built, planned for subsequent quarters. - Inorganic growth targets are still on, but acquisition closures might be delayed by a few quarters due to prioritizing organic growth and fund availability.