Indus Towers Ltd
NSE:INDUSTOWER
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
180.65
458.5
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Good afternoon, ladies and gentlemen. I am Rajita, the moderator for this conference. Welcome to the Bharti Infratel Limited Second Quarter Ended September 30, 2019 Earnings Call. [Operator Instructions] In case of a natural disaster, the conference call will be terminated post an announcement. Present with us on the call today is the senior leadership team of Bharti Infratel Limited. Before I hand over the call, I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. I now hand over the call to our first speaker of the day, Mr. Akhil Gupta. Thank you. And over to you, Mr. Gupta.
Thank you, and thank you all for joining us on this earning call of Bharti Infratel for the second quarter ended 30th September. Before I speak about the quarter and the key developments, let me first share an update on the merger scheme with Indus Towers. As you will recall in April 2018 when we announced the merger of Bharti Infratel with Indus, we had a long stop date of 24th October 2019, a period of 18 months in that scheme of [ tele ] information. This long stop date required many closing conditions to be completed, including, but not limited to, the comment that [ we will get ] filings. As for the status, we have received most of the government approvals, except for 1 pertaining to the FDI announcement from the Department of Telecommunication and DOT. That were been pending. The Board of Directors of Bharti Infratel yesterday reviewed the status and concluded that since that vital approval has not been received and therefore we are not closing conditions and the classes have not yet been able to start, it is not possible to complete the merger by the nonstop date. The Board thereafter authorized the Committee of Directors to explore and evaluate all possible options to secure the best interest of the company and its shareholders and at the current set of circumstances. For that, the Board also mandated that the committee bring forward its recommendation to the Board on or before 24th October 2019. And based on the recommendations received, the Board shall take a suitable decision on the bid to award, which, of course, we will share with you as soon as the Board makes a decision.Moving on to the business side. I think there were 2 good developments this quarter. First, as you all know, the Indian Mobile Congress was held recently. It saw participants, including the mobile operators from India, equipment providers, policymakers, discussing and showcasing new technologies, particularly 5G, Internet of Things, Smart Cities and the related use cases and applications.The second one was release of EY's [ competitive ] report titled Next-gen Infraco -- unlocking new business opportunities, some of which explores opportunities for companies infrastructure like Infratel and Indus to go beyond their traditional tasks to additional revenue streams such as fiber, small cells, edge data centers, data center WiFi and Smart Cities and beyond. Such shared infrastructure indeed will become necessary over the next 4 to 5 years for supporting the operators in providing digital services on 4G, 5G and the other evolving technologies in a cost-effective manner across India. As per the report, such aggressive opportunities and requirements will entail outlay in the region of USD 10 billion to USD 13 billion, a very large CapEx outlay which we believe is best incurred on the basis of sharing between operators. This, to our mind, provides a huge potential of growth for companies like ours. Coming to the financial and operational highlights of the quarter. The results of the quarter, I must, first of all, use a disclaimer are not comparable to the results of Bharti corresponding quarter last year. This was on account of 2 things. One, impact of India AS 116 that will be lease accounting came into effect from 1st of April 2019, and that resulted in a significant increase in EBITDA. And B, the reversal of tax provision of last quarter and lower provision this quarter due to approving the reduced income tax rate of 25.17% instead of 25.94%, which was announced recently. Based on the above and with disclaimer as above, as of 30th September, the consolidated tower base stood at 93,421 and the consolidated co-locations was at 173,406 with a factor of 1.86. It is noteworthy that after declines in the previous quarter ranging from 13% to 20% on a year-to-year basis, in the last 4 quarters, the co-locations are largely flat this quarter, declining just 0.6% on Y-on-Y basis. Towers, on the other hand, are increasing -- have been showing an increase in Y-on-Y trend for the last couple of quarters, which points to densification requirements of the operators. The consolidated revenue for the quarter at INR 3,638 crores was largely flat on Y-on-Y basis. Excluding the impact of Ind AS 116, the revenue would have been INR 3,561 crores, declining 3% year-on-year.Similarly, consolidated EBITDA at INR 1,885 crores grew to 25% Y-on-Y on reported basis with an operating margin of 51.8%. However, excluding the impact of Ind AS 116, the EBITDA would have been INR 1,486 crores, more or less flat, down nearly 1% year-on-year with a margin of 41.7%, up 60 basis points Y-on-Y. The consolidated profit before tax was at INR 1,023 crores, which grew 6% Y-on-Y. On like-for-like basis, this growth would have been 1% year-on-year.As mentioned earlier, we decided to let the new tax rate and the current quarter tax rate incorporates the impact of the same on the profits for the half year ended 30th September. First, the consolidated profit after tax for this quarter stood at INR 964 crores, showing a growth of 61% year-on-year. However, if we exclude the impact of Ind AS 116 and the difference in the tax provisions, the tax for the quarter would've been INR 729 crores, up 14% Y-on-Y on like-to-like basis, that is if the tax was provided at the earlier 25% rate.Operating free cash flow at INR 1,080 crores grew 8% year-on-year. However, without Ind AS 116, it would've been 1% year-on-year. The return on capital employed pretax and our return on equity posted for the quarter was very healthy at 26% and 28%, respectively, versus 34% and 16%, respectively, in quarter ended 30th September 2018.I would also like to announce that we announced yesterday that S. Balasubramanian, the CFO of the company, has expressed his intention to explore opportunities outside the group and he has tendered his resignation, which will be effective from the closing of business hours on 5th December 2019. On behalf of everybody at Bharti Infratel, I would like to thank him for his immense contribution to Bharti Infratel in the short period of time that he was with Infratel, and on a personal note and more important, for his contribution to the Bharti Group, where he was a [ invaluable ] for the last 14 years. I wish him all the best.In summary, after a year of tremendous turbulence due to large-scale exits by Vodafone Idea, I am really pleased to note that we are practically back at the same level as last year, which indicates a steady growth which we are achieving. We expect the growth to continue on the [ dark side ] in future. We also expect that our companies favor the major beneficiaries of large opportunities in adjacent areas as I pointed out above because of our experience and expertise and a very, very strong balance sheet.Thank you all. We can now open the floor for questions and answers, please.
[Operator Instructions] The first question comes from Mr. Parag Gupta from Morgan Stanley Mumbai.
So just my first question is with respect to the merger update that you provided to us. Could you give us a sense of what in your view is holding up the final government approval? And what are some of the options that are actually available to the company going forward?
Well, obviously, the comment that we will inherit, as far as we know, [ may ] because of the procedure involved. And as far as the options are concerned, I think it may not be right for me to share it with you before I share as part of the committee and the Board on the 24th. And as I mentioned, we will -- of course, the Board will convey its decision and we'll announce it to the markets on 24th. And we will follow it up with a call, which [ will also ] be fixed as soon as possible thereafter.
Okay. Got it. And my second question is, the [ langia ] talked about touching close to 99% population coverage and incremental CapEx will be lower to that extent. And we already know what is happening with one of the other operator with respect to debt. So how should one think about tenancy additions, let's say, over the next 3 to 4 quarters? Should we see anything that could accelerate this process? Or do you think it should be more or less in line with what we saw in this quarter?
Hi, Parag, Bala on this side. Firstly, we are seeing some update on new tower build-out that you can see out of the numbers, too. And also, as Akhil mentioned, after 5 quarters of year-on-year negative growth, we are seeing for the last 2 quarters at least positive net addition. We hope this momentum continues. From our own standpoint of -- as Akhil mentioned, operators were going through a consolidation Phase 2, and we did see a slowdown that's coming in on account of consolidation primarily [ on woridia ] We think a large part of that has also played out. We expect things to pick up from here. As I said we have seen some early uptick on rollout numbers that we are seeing from operators, too. On Jio, I wouldn't like to make specific comments, that's for Jio to answer in terms of how they did [ debate this ] from here on. The actual data shift in terms of both the amount of traffic carried and also the number of sites that they have been building the past. We do see them going through a phase where they try to reevaluate the next phase of rollout.
The next question comes from Mr. Sanjay Chawla from JM Financial Mumbai.
My -- both the questions are related to Indus. First question is, what percentage of Indus Towers stock has been pledged to lenders by one of the shareholders, if you could disclose that. And secondly, there's a significant amount of debt in Indus Towers right now, and that has gone up I think over the last 2 quarters. So what is really -- is it in anticipation of a cash payout, which is likely to happen? I don't know, maybe if you could just explain why the debt has gone up. And a small question also on the receivables just keep going up. Any comment on that?
So let me take up the first one. Well, all I can say is that the 42% in Indus owned by Infratel is not pledged. As for the balance, I don't think I am authorized to disclose even if I know. I think you have to ask that to Vodafone-Idea and [ BP ] and Vodafone.
And is that an increase in Indus?
Indus is a normal increase I think [ it has been said by ] take some debt and CapEx in anticipation of payments to Vodafone-Idea.
On the receivables, we are having a slight decrease in the receivable over the last few quarters. This is because of the back of -- in terms of the backdrop on the financial status in terms of the operators' [ pension ]. And we are looking at it in terms of how [ we max our ] monthly payment terms for the operators. And as we have [ found the amount that could make a basis ] to all the operators. And I believe that this will incentivize the customers to come back and [ invest in for the benefit ] of the company.
Okay. Just staying on that. What is the provisioning policy with regard to the receivables currently?
So essentially, we provide for greater than 90 days.
Okay. So this is a policy that has been continuing so far and there is no plan to change it?
Yes. That and the quarterly [ pack ] as well.
The next question comes from Mr. Rajiv Sharma from SBI Capital Mumbai.
Yes. Just a couple of questions from my end. I understand that there is a regulatory delay in terms of the approval for the merger, but is there a need to [ lead ] with it? Because they are -- the mergers could be done or not because the management [ it says ] has previously highlighted the various positives and synergies and maybe circumstances or the [ technical ] dynamics have been [ beat ] but the big picture kind of [ permits of that ]. So what is driving that view? Okay. The legality aspects are there. But one could just [ move to ] roll over the date as well. The other aspect is your CapEx. Have you not seen much tower addition, the demand has been weak so if you could help us provide color on CapEx, what has been driving that? That's it for my side.
Okay. So first of all, let me answer the question regarding the merger. I think very clearly, procedure process and procedure in terms of approval is just one of the aspects, and that is precisely some of these issues where current circumstances, that's why authorize the committee to quickly come back. It's exactly the same answers on what is their recommendation on various options available. And I will request that we wait for a couple of days for the Board to make an informed decision with respect to the various options.
Your question on CapEx, Rajiv. As I mentioned -- Akhil also mentioned that we are seeing some uptick on the newbuild towers that's happening right now. The number of towers that we build on a consolidated basis are close to what we have built in the full year in the last 2 years. So given that, you will see a small uptick on CapEx, but not very significant from the levels that we've seen in the past.
Yes, just a follow-up. So apart from the 3,000 towers you mentioned that -- where revenue is coming, but with a slight uptick, is there anything incremental which is pending above the 3,000 towers?
Nothing.
So -- and by then these 3,000 towers will be absorbed in the base?
So long as they continue, they continue to pay we rent them and hence we continue to build them. The day they remove the equipment that will be when is also how long we expect [ to invest ]
A couple of months normally. The project land, they tend to execute over a period of time and also redeployed it in some of the locations if it as needed. So we expect that to be done in a couple of months.
And is there any [ new financing ] that has come from the Vodafone-Idea just a couple of [ months let's say ]
Again, I can't give you customer-specific financing additions, but we do see them continuing to doing small amount of rollouts.
[ All right and that ] is not surprising compared to what is beyond that.
Yes.
The next question comes from Mr. Vivekanand Subbaraman from AMBIT Capital Mumbai.
A couple of financial questions. Is there any change in the contractual terms that affect the energy margins? They continued to remain low for the first half. And second financial question is, how much of exit penalty is part of rental income? Is it INR 90 crores or higher? And how should one look at this on a BHI and plus 100% of Indus basis?Second question is, you mentioned that there are -- the tower requirements are going up and your gross tower addition has picked up. So I understand that this is likely to be because incumbents are catching up with Jio on 4G population coverage. But beyond that, will the industry need towers? And how should one look at the long-run tower demand for the industry?
So let me answer the first and the last question. I think I'll leave Bala to answer the second one that you had. In terms of the first one, on energy. We've said that energy contracts are -- we try to move into a construct where we sign the contract for a certain period of time so that there are incidents where [ we can leave the ] parties to try and reduce that. But some of these contracts do come up for renewal, and that's the impact that you're seeing, besides the seasonality impact that is typically there between the first and second quarter owing to [ floods in summer that ] went by. We still expect that on a full year basis, we should be towards the 3% goal that we've set in the past for [operators]. So we continue to work with operators. So there has been [no cause that] we have seen the margins look lower, on this quarter in particular.On the coverage front, we do see 5G being built for capacity and coverage. Today, I think data usage is going up steadily, and we do see that [ on a build we are ] there are 5 significant [ listed ] in every time and new sites is placed in these locations. Again, there is huge amount of traffic that you're able to generate for the growth there. So we think together, in the long run, that besides coverage, there will be sites required more and more for capacity as the utilization goes up, as you get high-end devices, as you get applications that are going to supply, rich content from normal HD to 4G and beyond. We are -- so these trends will continue. And that's one of the reasons why we do see that there are sites that will keep coming in for capacity requirements and then they start moving into small cell [ in building ] and those could be other ways to cater to the capacity demand there. And of course, coverage does remain. There are also sites being built in the more parts as part of the USOF project II. So we do see tower build-out happening across the country. And there are still, if you look at the last report that was submitted in the [ bottom of the ERA ] -- The discussion was more than [ 50,000 ] villages still remain to be connected in terms of coverage and there is [ now an ] emphasis to see that [ ENB ] get connected in a reasonable future time.
On the exit charges, I -- it's already there in the report. But just to respond back, I think we have recognized INR 101 crores in this quarter. And on an ongoing basis, based upon the current settlement that we have done, it is likely to be INR 100 or INR 150-crores-odd. That's to come regularly for the next 2.5 or 3 years. So it's a pretty normal revenue now.
Okay. Just 1 or 2 small follow-ups. You mentioned that the alternatives, small cells, in-building coverage, et cetera, are also there for operators for capacity needs. Has your dialogue with operators progressed on evolving a model for sharing of infrastructure on small cells and in-building coverage also? And secondly, the -- in the charges you mentioned, can you also give the numbers for BHI and plus 100% Indus, 2Q FY '20 and likely increase?
So let me answer the first one again. On small cells, we do have a product that's offered to the customer, given that we are participating in Smart Cities and other [ vendors ] there, too. There are a small amount of deployment that operators have done in some of these towns, particularly where as I said there are street furniture and other things that have been available to us. In-building as a product was there even during 2G time, but the penetration was very limited to areas like malls and airports, railway stations where there are high footfalls. We are seeing some traction [ moving towards into ] there and other buildings that are of commercial interest, too, but the pace has still not picked up. And we believe, given that data is at higher frequency bands, their penetration inside the building is even weaker. And also, global statistics say that about 70% to 80% of data is actually consumed indoors. So we think there is a huge potential there. People who want to compete on service differentiation, they use pretty much higher frequency bands [ to most of the product ] within buildings or in areas of higher footfall, but that's yet to take off in a meaningful way for us to start reporting that as a separate line item.
On the -- follow-up question the exit charges, as we mentioned, the cost [ of project is to ] become more it will be around INR 150 crores.
The next question comes from Mr. Himanshu Shah from Dolat Capital Mumbai.
Sir, can you just provide some color on the tax rate? From the [ forestal ] the tax rate has been lower than the marginal tax rate in the [ rywansway ] so what should we [ assume ] from here at [ consolidated level ]?
So as stated by the Chairman in the call, the new [ act in this achery ] we are offered a new rate, which is 25.17%, which is the announced rate. And you can assume that, that should be the rate on which we will be on the full year basis. And...
Thank you sir, and -- sorry. Go ahead. Go ahead, go ahead.
Okay. So this quarter, we had the impact of the previous quarter tax, which is [ at a previous ] charged at 34.94% have come to 25.17%. So that is also [ proven that ] is roughly around INR 109 crores, right? But also, the deferred tax liability, which we have stated in the balance sheet in the past, has been restated from 34.94% to 24 -- 25.17%. That is INR 170 crores which has grown in this quarter. So going forward, there won't be this kind of an adjustment. It will be at [ 24.50% ] and 25.17% is what you should assume.
[Operator Instructions] The next question comes from Mr. Gaurav Singhal from DK Partners Hong Kong.
Asking question on Indus dividend. I see that you haven't got any dividend in this quarter as well. What's the full year March '19 declared dividend for Indus? And also, what's the net and gross financial debt [ option ] on a stand-alone basis?
Well, basically, the dividend in Indus was not declared because obviously we were waiting for the merger. And we will have to see -- I don't have the figure offhand as to what will be the cumulative amount that there [ may] dividend. So maybe you can come back separately on that.
So -- but does the shareholder agreement require them to pay out like a certain percentage as far as dividend?
I don't believe they have a shareholder agreement on that. Ultimately, if the company [ then accepts that idea then they ] dividend payout.
Got it. What's the net and gross financial debt of Indus? In the latest numbers.
In [ could you repeat ]?
Sorry, what's the gross and net financial debt at -- on a stand-alone basis?
Net debt -- gross net debt of Indus. So Indus, net debt will be roughly around INR 4,000 crores.
And you mentioned in your release on the merger that apart from the regulatory approval there are some other cities that have also not been met. [ Do you mind saying ] what [ percentage roughly these cities are ]?
There are the usual closing adjustments and calculations based on related net debt position, et cetera, et cetera. So there are all those processes which need to be completed, and there's -- those definitely take time.
All right. And then for a last question. Can you comment a little bit on the rental -- on the trend for rental per tenant? So like, do we have visibility on that number for the next 3 years or so, or how should we think about the trend for that going forward?
It's difficult for us. We explained the construct, but the way it was set up is that the tenancy ratio moves up, the rent per tenant comes down, but as we've found in the past year. As we rent newbuild towers, again, the rent per tenant moves up. So it is difficult to get an exact model to tell you where we expect this to move. But the trend, particularly in that sense, when the tenancy ratio moves up as an overall ratio number, this will come down, other than the 2.5% annual increase that's built into the tenancies there.
And for the...
And some loading charges which keep reloading.
The next question comes from Mr. Varun Ahuja from Credit Suisse Singapore.
First, I want to check on rental revenue per operator [ share again ] operator. For Indus, it's around 5% on a quarter-on-quarter basis. Any specific reason [ that we've seen ] income will be coming down that's the reason? I just wanted to hear commentary on that, what has led to the decline in [ sharing ] revenue per tenant during the quarter? And on dividends. Is it fair enough to assume or expect that with the reduction impacts, that should help the dividends payout? Would it mean that management will consider [ or rescind ] their payout policy? How should we think about the tax benefit and dividends?
On the Indus, average revenue per tenant last quarter had certain one-offs [ which are centered ] in a higher area BT content. And you should assume that this should be the normal for the outcome -- [ as for ] if you look at [ we compare current CT trends ] between March versus September [ will be currently minded ] other than for the impact of the [ vita ] content.
And dividend [ how will be ]
Dividends together with the tax rate coming down, will they be higher or lower, that was his question.
We have a dividend policy where we do declare whatever net profit is available. I think it is about 80% of [ that I think ]. So yes, as the net profit goes up, there will be more dividend, unless it's required for CapEx or other things.
And lastly, are you seeing the impact from the 3G network being closed? Is it going to be meaningful [ with ] the operator [ being to ] close to?
No, not at all. Actually, a lot of this is getting re-used for 4G. There are some, we are not seeing an impact on account of 3G closure of any of the operators.
The next question comes from Mr. Gabor Sitanyi from Fiera Capital London.
Just wanted to follow up on that merger review, which I think the question suggested seems a little bit odd. Because if you kind of miss a deadline and you just wait for 1 permit, then you may extend the deadline. I just really wanted to understand that, was that review also requested by the other parties. Or is it strictly an Infratel internal review? Or have you been encouraged by Bharti, or Vodafone-Idea to review the deal? That is my first question.
I'm unfortunately not in a position to disclose any development in this regard because I [ vote it ] duty-bound to make my recommendations to the Board based on all possible expirations and possibilities. And therefore, humbly, I would request you to please wait till 24th when the Board both take a decision and make the necessary announcement.
Right. The second thing is just following up on what you said earlier. Because I also wanted to ask about why the rent tenancy was falling, especially at Indus. Can you perhaps say that this one-off you mentioned at the last quarter, what was that and how big was it in the Indus revenue line?
So this do normally happen if the operators in terms of some settlementss or some of the writebacks that keep coming. So I don't think we'll be able to discuss any specific transaction, but the concern is the rollout is happening in the last quarter.
Right. I wasn't expecting you to disclose the specific transaction, but it would be helpful if you have such one-offs to make it clear at the time that you had a one-off. Because otherwise, people obviously mistakenly use the higher base. But yes, maybe if you later can disclose at some point how big that was because we need to see the clear picture in terms of what is being sustainable.
Yes, I think that's a good point. But what I would request you to please use the current rental per customer as the actual rentals per customer going forward.
The next question comes from Mr. Abhiluv Gupta from Global Infrastructure Partner Mumbai.
Historically, the energy investments have been higher than the energy cost, but there appears to be a division in this quarter. Can you please [ detail ] the reason for this?
I said this earlier, there are contracts that have, long-term contracts, some of them yearly contracts that have come up for renewal. And as part of that renewal, some of the energy gains that we were having in the past have been passed on besides the seasonal impact on which we do see cost moving up. So as part of the arrangement in these contracts, we tried [ most ] towards energy cost reduction for those operators. And that is what you're seeing as an impact in the first and second quarter that you've seen. As I said, on a full year basis, we still hope from being a zero-sum [ game ] to make about -- up to about 3% profit. So I do hope to see that will lead to [ at least ] a 3% level by the year-end on a full year basis.
Right. So but the energy reimbursement would be higher or equal to the cost?
Yes. [ We would then] we could have probably margin [ division ] on both.
Margins could have reduced a little bit?
Yes.
Okay. My second question was on the co-lo tenancy additions. So it appears the co-lo tenancy additions would have typically been in the range of 4 70 to 4 80. So which is quite flattish. So do we expect a higher co-lo tenancy rollouts in the future? Or what's your view on this?
We hope this will pick up from hereon. These are early signs, and we do not see all of it as [ cracking ] at this stage. So we hope that as the market gets more competitive on server differentiation, there will be a higher uptick on these co-lo numbers that we see here.
A follow-up question comes from Mr. Vivekanand Subbaraman from AMBIT Capital Mumbai.
Yes. What will your market share of the telecom industry's macro towers be? And how is the same for small cells and in-building? And how has this changed in the last year also? Can you please explain that?
Again, Vivekanand, I'm sorry I do not have a public report that I can quote on. And unlike the operators, we do not have a platform where I can get authentic information to establish how these market shares would have moved. We do track some of these numbers internally. But again, as I said, those are as accurate as I could get information around. So hard for me to make that statement. We've been gaining on an overall tenancy market share that I knew of, that then the time Jio started to build their own towers in between. So after that, we don't have a public report which I can refer to and tell you exactly where we stand on some of these market shares. Last was the 38%, that 43% on co-locations that we had. And that report is slightly dated now, so it does not have so much relevance today.
But I think clearly between [ invernin ] and Infratel, we are the clear leader in [ and all like in path ]
Okay. And any sense on how this share would be in small cell and in-building coverage build-out?
We will absolutely and certainly be the leaders in that as well, Vivekanand.
The last question comes from Mr. Aniket Sethi from Kotak Securities Mumbai.
This is Rohit from Kotak. Quick couple of questions. One, if I could get a comment on the [ development ] trends in rental per tenant between Indus and Bharti Infratel stand-alone, please? [ Interim ] on the other one not so much. The second question on energy. These renewals perhaps happen every year, right? So what is different this year? We haven't seen such weak numbers on energy margins in any of the previous years. So there is something different. Renewals cannot explain it, to be honest, so if I could get a comment on that also, please.
So renting per tenant, I think we just answered this earlier, too [indiscernible] for your benefit. On energy too, I tried answering that earlier. Some of the contracts are for 1 year, some are for 2 and some are for 3-year periods. So the maximum we've signed is about a 3-year contract. It just happens that some of these have come up for renewal at about the same time and also the seasonal effect that we have on the first and second quarter typically. So we do see that. It is pretty normal from our own standpoint of where we expect some of these to be. And again, we expect that some of these will again be long-term contracts, meaning you will have a larger window where you're able to bring in gains by bringing in initiatives to save on energy.
So on the rental side, it's just the LPT, as stated in the earlier response. Indus higher one-off in the last quarter [ it was due to ] higher revenue per tenant. And this is basically -- you should see on the figures the current, which is -- for the September rent should be the used for [indiscernible]. That should be the level.
Quickly on this. I'm also looking at the Y-o-Y numbers that takes out this one-off that [ the plus the ] previous quarter. I'm not talking Q-o-Q. Even on a Y-o-Y basis, on the stand-alone side, we have seen that almost a double-digit growth in rental per tenant adjusted for lease accounting, while for Indus it is materially lower at around 4-ish percent, if my math is right. That's what I was seeking some inputs on. Why is that divergent trend between the 2 entities Y-o-Y, not talking about last quarter's one-off at all?
[ This is an ] increase [ of put in ] on Y-o-Y is [ there an ] adjustment [ in there and was given ] adjustment to the prior period. There was slightly a higher impact that you saw, that's what Bala was referring to. If you look at Q1, [ the negative ] impact is showing a bump up on our performance [ that has not ] that you see there. And that bump-up is actually pre-Indus versus post-Indus. The bump-up in Indus was higher than that you saw in Infratel. But when you look at year-over-year basis, there has been an increase on both the sites that you see on those numbers, too. A little bit of difference is there on the loading and other sites that will be applicable in some of the cases, but not very material. As Bala said, this is the new base that will be there for Indus, too.
I'll take it off-line.
Yes.
At this moment, I would like to hand over the call proceedings to Mr. DS Rawat for the final remarks.
Thank you very much. As [ quite active ] despite loss of significant percentage of co-locations over the last 4 to 5 quarters, we've managed to close this quarter with consolidated revenue at INR 3,638 crores, down by 1%, and profit after tax at INR 964 crores, up by 61%. With the positive net adds during this quarter 2, we hope that this trend will continue post consolidation with the operators [ as they ] raise significant capital and will focus on this data strategy -- on their data strategy, sorry -- ensuring a strong 4G [ pan-India ] presence. We are fully prepared to capitalize on this and other emerging new opportunities such as 5G, Smart Cities, IoT, et cetera, as highlighted in the EY Next-gen report, by playing a key role in building and sharing [ WiFi ] telecom infrastructure with all customers on a nondiscriminatory basis. Before we close, we would like to take this opportunity to thank our CFO, S. Balasubramanian, for his valuable contribution at Infratel over the last 1 year. We wish Bala the very best. On behalf of the entire Bharti Infratel team, I thank you all for your continued support and wish all of you a very happy Deepavali. Thank you.
Ladies and gentlemen, this concludes the conference call, you may now disconnect your lines. Thank you for connecting to Audio Conference service from Airtel and have a pleasant evening.