Indus Towers' margin slips again as interest costs rise 30.36% YoY
The 55.76% operating margin remained highest among seven reported telecom peers, but Q4 marked a second straight quarterly decline.
Filed 30 Apr 2026, 22:30 IST · after market close · Indus Towers Ltd (INDUSTOWER)
Key takeaways
- Consolidated revenue grew 4.84% YoY, but operating margin narrowed 0.20 percentage points as expenses grew faster.
- Net profit rose just 0.78% YoY as interest expense increased 30.36%, despite a 0.51 percentage-point tax-rate reduction.
- The stock fell 2.37% on the first trading day, smaller than its 3.93% median absolute post-results move.
Price around the results
Revenue growth stayed positive but lost sequential momentum
Consolidated revenue grew 4.84% YoY, while the 0.56% QoQ decline points to broadly flat momentum at the end of FY26. Operating profit increased 4.46% YoY, but the slower sequential revenue trend limited operating leverage.
Costs and interest held back profit conversion
Expenses grew 5.32% YoY against revenue growth of 4.84%, narrowing operating margin by 0.20 percentage points; sequentially, revenue fell 0.56% while expenses declined only 0.30%, trimming margin by 0.11 percentage points. Interest expense rose 30.36% YoY, while depreciation increased 8.55%, keeping profit before tax almost flat despite the operating profit increase. Other income contributed 6.56% of pre-tax profit, so it did not dominate the earnings result.
Margin has declined for two straight quarters, despite sector leadership
Operating margin fell from 56.90% in Q2FY26 to 55.87% in Q3FY26 and 55.76% in Q4FY26, making this the second consecutive quarterly decline after the Q2 peak. The 55.76% margin was 36.17 percentage points above the 19.59% median for seven telecom peers that had reported, placing Indus Towers highest in that comparison. Sequential net profit still rose 0.96%, helped by a 2.42 percentage-point reduction in the tax rate and a 3.72% fall in interest expense.
Initial market fall was milder than the stock's usual results reaction
The stock fell 2.37% on the first trading day after the results and was down 1.77% after one session, with volume at 2.03 times its usual level. The move was consistent with the stock's recent pattern, with six declines in eight results reactions, but smaller than its 3.93% median absolute move. It was up 0.17% after five sessions and 7.05% after 15 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹8,101 cr | ₹8,146 cr | -0.56% | +4.84% |
| Other income | ₹155 cr | ₹154 cr | +0.91% | +69.25% |
| Expenses | ₹3,584 cr | ₹3,595 cr | -0.30% | +5.32% |
| Operating profit | ₹4,517 cr | ₹4,551 cr | -0.76% | +4.46% |
| Operating margin (%) | 55.76% | 55.87% | — | — |
| Interest | ₹469 cr | ₹487 cr | -3.72% | +30.36% |
| Depreciation | ₹1,838 cr | ₹1,798 cr | +2.22% | +8.55% |
| Profit before tax | ₹2,365 cr | ₹2,420 cr | -2.27% | +0.10% |
| Tax | ₹572 cr | ₹644 cr | -11.17% | -1.97% |
| Net profit | ₹1,793 cr | ₹1,776 cr | +0.96% | +0.78% |
| EPS (₹) | ₹6.80 | ₹6.73 | +1.04% | +0.74% |
Operating margin of 55.76% compares with a Telecommunication sector median of 19.59% across 7 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.37% | -2.87% |
| Next session | -1.77% | — |
| 5 sessions | +0.17% | +0.93% |
| 15 sessions | +7.05% | — |
| 30 sessions | +0.44% | — |
Volume on the results session was 2.03× its 20-day average.
What to watch
- Whether operating margin holds above 55.76% after two consecutive quarterly declines.
- Whether interest-cost growth moderates from 30.36% YoY.
- Whether revenue returns to sequential growth after the 0.56% QoQ decline.