Suyog Telematics LtdQ2 FY24Telecom - Services

Suyog Telematics Ltd

Q2 FY24 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 2

→FY'25 revenue target is around ₹195+ crore, reflecting growth from ongoing tower rollouts.
→The company plans to add approximately 4,500 new towers over the next 9 months and another 4,500 towers the following year (FY'26).
→FY'26 revenue guidance is conservative at ₹320+ crore, factoring in tower tenancies as of FY'25 end; actual revenue could be higher with increased rollout and tenants.
→Expansion across 15 states is planned, with Maharashtra continuing to dominate but incremental revenue expected increasingly from other states (30%-40% from outside Maharashtra).
→The Fiber to the Home (FTTH) rollout is expected to contribute significantly to revenue in the next 2-3 years, complementing tower business.
→Capacity to capture a bigger market share depends on improving financial capability and funds visibility.
→EBITDA margins expected to stay stable around 60-65% despite growth.

Category 3

→Suyog Telematics targets revenue of around ₹195+ crore for FY25 and ₹320+ crore for FY26, indicating strong top-line growth.
→EBITDA margins are expected to be stable around 60-65% in the medium term, with FY24 margins having been around 70%.
→The company plans to add approximately 4,500 towers annually for the next two years, driving tenancy and revenue growth.
→Increasing tenancy ratio per tower is expected, though BSNL's rural-focused strategy may limit massive jumps; overall tenancy growth should improve margins.
→Earnings growth is supported by internal accruals and promoter funds for capex up to Q3 FY25, with ₹40 crore from warrant conversion also contributing.
→As towers and tenancies increase, operating leverage is expected to improve, supporting profitability.
→Long-term vision targets sustained digital infrastructure growth aligned with India’s 5G rollout ambitions through 2040.

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Yes

→As of Q1FY25, Suyog Telematics has not finalized any new borrowing plans for FY25.
→They have enough funds for Capex up to end of Q3FY25 from internal accruals and a ₹40 crore inflow expected from warrants issued to promoters.
→Post Q3FY25, the company will assess the need for raising additional funds or debt based on funds availability and business requirements.
→The current Capex plan for 4,500 towers in FY25 (~₹450-475 crore) is covered through internal accruals and promoter funds.
→The company may consider borrowing or fundraising after December 2024, but no concrete plans have been made yet.
→They plan to give more clarity on fundraising needs in the Q3FY25 call depending on the financial situation at that time.

Yes

→Current planned rollout by Suyog Telematics Limited is approximately 4,500 new towers over the next 9 months, spread evenly across quarters.
→The company has sufficient funds for Capex up to Q3 of the financial year through internal accruals, promoters' funds, some debt, and ₹40 crore expected from warrants.
→Operators, including Airtel, Jio, Vodafone, and BSNL, have already placed active equipment orders with suppliers like Ericsson and Tejas (for BSNL - Make in India initiative).
→The company views the telecom infrastructure market as having a substantial opportunity, with an industry need for around 6 lakh new towers in the coming 2-3 years.
→Expansion beyond current financial capability depends on better fund visibility, with plans to revise targets accordingly.
→Master Service Agreements (MSAs) with operators have long tenure (around 15 years), indicating steady future income from these contracts.

Yes

→Suyog Telematics plans to add 4,500 new towers over the next nine months, with a Capex of approximately ₹450-475 crore (around ₹10 lakh per tower).
→Capex for FY'26 is expected to be around ₹300 crore, mainly for tower rollout and infrastructure expansion.
→Up to Q3 FY'25, funds for Capex are covered through internal accruals, promoter funds, and ₹40 crore expected from warrants; no borrowing finalized yet, but potential debt considerations post Q3.
→Full-year benefits from towers built in FY'25 will reflect in FY'26, and similarly, FY'26 Capex benefits will appear in FY'27.
→The company is aggressively rolling out FTTH (Fiber to the Home) infrastructure in key states, targeting future revenue from fiber alongside towers.
→Future Capex plans depend on fund availability, with room to scale up investments if financial visibility improves.

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