Indus Towers' profit barely grows as higher interest offsets operating gains
Revenue growth outpaced costs year on year, but sequential cost growth narrowed the margin and lifted the tax rate by 1.43 percentage points.
Filed 27 Jul 2026, 19:54 IST · after market close · Indus Towers Ltd (INDUSTOWER)
Key takeaways
- Consolidated revenue grew +4.64% year on year, but net profit rose only +0.52% as interest costs increased +22.45%.
- Sequentially, expenses grew +6.74% against revenue growth of +4.07%, narrowing operating margin by 1.14 percentage points.
- Operating margin remained 35.2 percentage points above the 19.42% median of six reported telecom peers.
Price around the results
Revenue momentum held, but profit conversion weakened
Indus Towers reported consolidated revenue of Rs 8,431.1 cr in Q1FY27, up +4.64% year on year and +4.07% sequentially. Operating profit grew +5.88% year on year, but profit before tax increased only +0.58% and net profit +0.52%. The gap reflects higher interest and depreciation costs, which rose +22.45% and +11.11% year on year.
Sequential cost growth cuts operating margin
Quarter on quarter, expenses grew +6.74%, faster than revenue at +4.07%, so operating margin narrowed by 1.14 percentage points. Year on year, revenue growth exceeded expense growth of +3.17%, supporting a 0.64 percentage-point margin improvement. Other income contributed 5.16% of pre-tax profit, so it was not the main driver of reported earnings.
Margin remains far above reported telecom peers
The 54.62% operating margin was 35.2 percentage points above the 19.42% median among six telecom peers that had reported the quarter. The quarterly trend is mixed: margin improved from 53.98% in Q1FY26 to 56.90% in Q2FY26 before easing to 55.87%, 55.76% and now 54.62% over the subsequent three quarters. The recent sequence marks a second consecutive quarter of margin decline.
Results were filed after market close
The results were filed after market close, so there was no immediate market reaction in the reported session. After the last eight results, the stock rose twice and fell six times, with a median absolute move of 3.93%, indicating that declines have been more common than gains after recent releases.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹8,431 cr | ₹8,101 cr | +4.07% | +4.64% |
| Other income | ₹121 cr | ₹155 cr | -21.91% | +42.42% |
| Expenses | ₹3,826 cr | ₹3,584 cr | +6.74% | +3.17% |
| Operating profit | ₹4,605 cr | ₹4,517 cr | +1.96% | +5.88% |
| Operating margin (%) | 54.62% | 55.76% | — | — |
| Interest | ₹486 cr | ₹469 cr | +3.54% | +22.45% |
| Depreciation | ₹1,894 cr | ₹1,838 cr | +3.04% | +11.11% |
| Profit before tax | ₹2,347 cr | ₹2,365 cr | -0.76% | +0.58% |
| Tax | ₹602 cr | ₹572 cr | +5.10% | +0.77% |
| Net profit | ₹1,746 cr | ₹1,793 cr | -2.63% | +0.52% |
| EPS (₹) | ₹6.62 | ₹6.80 | -2.65% | +0.46% |
Operating margin of 54.62% compares with a Telecommunication sector median of 19.42% across 6 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 54.62% after the 1.14 percentage-point sequential decline.
- Whether interest-cost growth moderates from +22.45% year on year.
- Whether net profit growth moves beyond +0.52% as revenue growth remains at +4.64% year on year.