Shares of Indus Towers were gaining strongly on Wednesday after the telecom infrastructure firm posted solid growth in its third-quarter numbers.

What Happened: The Bharti Airtel-owned firm swung to a net profit of ₹1,541 crore from a ₹708 crore net loss in the same period a year ago. This impressive result was driven by strong tower additions, especially due to the nationwide 5G rollout by top customer Bharti Airtel, steady collections, and a substantial year-on-year decrease in net finance costs.

The tower company’s net profit marked a 19% sequential growth, rising from ₹1,295 crore in the fiscal second quarter to September 2023. Despite continued recovery challenges from another key customer, Vodafone Idea (Vi), Indus Towers has showcased resilience.

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Vi’s funding plan has not materialised, and committed payments for the outstanding amount as of December 31, 2022, have not been made. However, Indus continues to recognise revenue from operations related to Vi, as the customer has been making monthly payments since January 2023.

Indus Towers highlighted its record tower additions for the third consecutive quarter, contributing to a strong financial performance. The managing director, Prachur Sah, expressed optimism, expecting growth opportunities from Airtel’s network expansion and ongoing 5G rollouts.

Despite the positive results, the financial stability of Indus Towers remains impacted by the piling backlog of Vi’s old dues, exceeding ₹10,000 crore. Vi’s financial health significantly influences Indus Towers, as the telecom operator contributes over 40% to the tower company’s revenues.

Price Action: Indus Towers’ share price was up 5.09% at ₹228.15 in early trade on Wednesday.

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