Dividend on hold as Indus Towers conserves cash amid evolving industry landscape, eyes inorganic bets

The company added 2,468 macro towers and 5,777 colocations in Q1 FY26.

Indus Towers has put dividend payouts on hold for now, with the board opting to conserve cash amid an evolving industry landscape, stability of Vodafone Idea, elevated capital expenditure, and potential inorganic growth opportunities, Managing Director and CEO Prachur Sah said.

He added that the decision, aimed at bolstering the company’s financial resilience, will be reviewed by the end of the fiscal year. “The Board believes that this is in the best interest of the company, strengthening its financial resilience and enabling it to respond effectively to any emerging opportunities and or risks, ensuring the security of its long-term business interest,” Sah said during the Q1 earnings call on July 31.

The Board, he said, will continue to monitor the evolving situation closely and reassess its decision by the end of the financial year.“The board definitely is keeping the interest of the shareholder in mind…the board remains fully committed to creating value for the shareholders, including by way of the earliest possible reinstatement of distributions based on the above factors.”

The company’s dividend policy requires the board to consider certain predefined parameters, including the future cash requirements of the company, before distributing its free cash, Sah said.Replying to analysts' questions on the dividend decision, Vikas Poddar, CFO of Indus Towers, clarified that the company had already collected all backlog receivables and is generating healthy cash.

“And as part of our cash management, instead of keeping that cash idle, we have either reduced our debt or used it for a very strategic acquisition. But as and when the decision to distribute happens, I think all that will be utilised. It is only a cash management thing that we are doing,” Poddar said.

He confirmed that both FY26 cash flow generation as well as what was available in the previous year will be available for dividend payment when the board reassesses the decision.

Meanwhile, Indus is also exploring inorganic growth and consolidation opportunities, including strategic adjacencies beyond traditional tower infrastructure. “Our current focus continues to be within the tower infrastructure space, but we remain open to exploring adjacencies if they are strategic and value-accretive. That said, we are disciplined in our approach and will evaluate any opportunity with the same rigor and framework we applied during the Airtel tower acquisition,” Sah said.

“...we started some bit of consolidation when we took Airtel towers in the last quarter, and hence any other opportunities that are there to consolidate the towers we will be considering during the year,” he added.

The company added 2,468 macro towers and 5,777 colocations in Q1 FY26. Sah said Indus is confident of a robust tower rollout for the next 4–6 quarters and remains focused on customer leadership and cost control.

“...structural growth drivers like rising data consumption, increasing 5G adoption, and the network gap between operators continue to create meaningful growth opportunities,” he said.

Indus attributed elevated capital expenditure during the quarter to new tower additions, maintenance of aging infrastructure, and replacement of older energy systems with lithium-ion batteries.

Indus Towers has also recovered most of the pending dues from Vodafone Idea in FY25, helping the company generate a free cash flow of Rs 1,570 crore in the June quarter.

With the financially strained telco clearing a significant portion of its overdue payments, Indus Towers’ trade receivables dropped by Rs 406.4 crore in Q1 FY26 to Rs 4,361.1 crore. Vodafone Idea alone repaid Rs 88 crore during the quarter, Sah said.