The country's largest telecom infrastructure company Indus Towers on Tuesday posted a consolidated loss of Rs 708.2 crore for the December 2022 quarter, mainly on account of doubtful recovery from Vodafone Idea.
Indus Towers posted a profit of Rs 1,570 crore in the same period a year ago.
"The loss in the books was a result of the adoption of stringent accounting practices by the Company due to continued shortfall in collections from one of the major customers," Indus Towers in a statement said -- in an apparent reference to debt-ridden Vodafone Idea (VIL).
The company's revenue declined by about 2 per cent to Rs 676.5 crore during the reported quarter from Rs 692.74 crore in the December 2021 quarter, according a regulatory filing.
"Our financial performance remains impacted as we have adopted stringent accounting practices amid a persistent shortfall in collections," Indus Towers, Managing Director and CEO, Prachur Sah said.
VIL has proposed a payment plan to Indus Towers wherein they conveyed their ability to pay part of the billed amount till December 2022 and 100 per cent thereafter along with clearance in a phased manner between January 2023 and July 2023 of the old dues that would accumulate till December 2022.
"During the current quarter, the funding plan of the said customer has not materialised and although the committed part payment till December has been received, the customer has indicated challenges in complying with a higher payment plan in future," Sah said in a note.
Following the refusal of VIL to continue on higher payment plans, Indus has made an additional allowance of doubtful debt of Rs 2,298.1 crore and taken an impairment of the revenue equalisation asset up to September 30, 2022, for VIL worth Rs 493 crore.
Further, Indus has not recognised Rs 66.3 crore for the reported quarter in the revenue from operations due to uncertainty of collection in future.
"It may be noted that the potential loss of a significant customer due to its ability to continue as a going concern or the Group's failure to attract new customers could have an adverse effect on the business, results of operations and financial condition of the Group," the note said.
As on December 31, 2022, Bharti Airtel Limited along with its wholly-owned subsidiary Nettle Infrastructure Investments Limited held 47.95 per cent of shares and Vodafone Group Plc through its indirect wholly-owned subsidiary companies held 21.05 per cent shares in Indus Towers.
The company added 4,644 mobile towers on a year-over-year basis taking its total number of installed towers to 1,83,392.
VIL's gross debt in the September 2022 quarter stood at Rs 2,20,320 crore.