Bharti Infratel has reported Q1 FY17 revenue of Rs. 3210 crore (up 0.9 percent Q-o-Q). Ebitda margin dropped 210 bps Q-o-Q to 43.4 percent as energy margin declined to 3.4 percent from 9.6 percent Q-o-Q.

Infratel added 544 towers and 1366 tenancies in Q1 FY17 versus 753 towers and 3114 tenancies in Q4 FY16. Tenancy addition was impacted by 1179 tenancy cancellations by Videocon. Management attributed deceleration in tenancy addition to slower CapEx intensity of telcos. Ebitda margin declined 210 bps Q-o-Q to 43.4 percent on sharp fall in energy margin; ex-energy, Ebitda margin was flat Q-o-Q/up 10 bps Y-o-Y to 65.9 percent. Lower tax rate due to one-time gains related to mark-to-market revaluation of investments led to 71.0 percent Y-o-Y PAT growth.

The MSA amendment will provide a framework for contract renewal. It will provide option for anchor tenants to freeze rentals till parity between anchor and new tenancies is achieved leading to Rs. 15 crore per month impact, which will start reducing over a period of time. However, as the base rate itself starts increasing by 2.5 percent for every incremental tenancy, there will be no reset of rental in case of renewal; the complete arrangement will be NPV neutral.

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