Suyog Telematics Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Revenue grew 16% YoY in a seasonally weak quarter, while EBITDA margin expanded 201 bps to 75% on low-CapEx Airtel upgrades. The tenancy target slipped, but full-year revenue and PAT guidance held.
• The BSNL order is the story, and it is delayed again: the 6,000-site allocation now expected in December, pushing the rollout start to Q4 and billing to Q1 FY27. The 12,000 tenancy target spills into FY27.
• Vodafone and Airtel 5G are the near-term engines: VIL loaded 500 sites in a week and management is confident of 1,000+ by March; Airtel 5G deployment on 2,500 ULS sites started in November with minimal CapEx.
• Revenue per tenancy stabilizes at a lower floor: the metric recovered to INR25,000 from INR22,000, but management says it will not return to INR29,000-INR30,000 because BSNL's lower-rental rollout offsets Airtel upgrade gains.
• What to watch next quarter: whether the BSNL order actually lands in December, the pace of VIL and Airtel 5G deployment, and closure of the inorganic deals and data centre fibre project promised within the same window.

BSNL: The Anchor Order, Delayed Again

• Order timeline slipped: the allocation expected by October is now pushed to December, with management citing a 30-45 day window for process completion. The rollout will start from Q4 (January), and billing will begin only in Q1 FY27.
• Scale of the opportunity: management is confident of securing at least 6,000 sites from BSNL's pan-India tender, mostly higher-margin GBT sites, to be rolled out over 12-18 months.
• Revenue mix guardrail: BSNL is capped at 15%-20% of revenue by design, because management does not want any single operator to dominate. BSNL currently contributes 4% of revenue.
• BSNL's improving health de-risks the bet: the operator achieved operating cash profit for the first time in history and added more customers than Bharti Airtel in September, trailing only Jio. Its lowest-tariff positioning and rural strength support the rollout thesis.
• The integration bottleneck: 702 sites are already built and ready, but BSNL takes 3-4 months to integrate. TCS has committed to deliver all material by end of Q3, so integration and revenue recognition for these sites should begin in Q4.
• Separate EPC tender: BSNL is floating a tender for 6,000-7,000 sites on a one-time-charge-plus-maintenance model (not IP); Suyog is targeting 2,000-2,500 sites. The tender has not yet opened.

Shivshankar Lature: "BSNL is capturing more market than private operator in few months. They are already operating cash profitable and they are turning around the tables."

Vodafone & Airtel 5G: The Here-and-Now Growth

• VIL loading accelerated sharply: post positive developments from the Supreme Court and government, Vodafone increased its rollout drastically. Suyog received a 500-site order in the last seven days and crossed 500 total sites loaded; deployment is underway.
• VIL runway: management is confident of completing at least 1,000 VIL sites by March, with potential for significantly more depending on Vodafone's rollout strategy.
• Airtel 5G upgrade started: Airtel has begun deploying 5G on Suyog's 2,500 ULS sites across India. Service orders are received and deployment is in process effective November, with 250+ sites targeted for the month.
• Upgrade economics are favorable: the Airtel upgrade delivers INR2,000-INR3,000 upside per tenancy with minimal CapEx, a key driver of the EBITDA margin expansion to 75%.
• Second-phase opportunity: management expects Airtel and Jio to undertake a big rollout after VIL, and Suyog can participate while maintaining its operator revenue ratios.

Revenue Per Tenancy: The New Normal

• The drop and partial recovery: revenue per tenancy fell from INR29,000-INR30,000 (Sep '24) to INR22,000 (Mar '25) as 1,800 BSNL sites came online at INR7,000-INR10,000 per tenancy versus INR15,000-INR20,000 for private operators. It recovered to INR25,000 (Sep '25) on Airtel upgrades and the Lotus Tele Infra acquisition.
• The ceiling is now lower: management explicitly stated the metric will not return to INR29,000-INR30,000 because ongoing BSNL rollout from Q4 will offset further Airtel upgrade gains. The expected stable range is INR25,000-INR27,000.
• BSNL's disproportionate drag: an analyst flagged that BSNL is only 4% of revenue yet caused a large per-tenancy decline. Management explained the drop by comparing three time points but did not fully reconcile the magnitude.

Tushar Shah: "It will not go back to INR29,000, INR30,000 per month because along with Airtel 5G upgrade we are also doing BSNL rollout from Q4 onwards. So, it should be stable between INR25,000 to INR27,000."

Guidance, Tenancy Spillover & the Inorganic Bridge

• Full-year guidance held despite tenancy slip: revenue of ~INR250 crores and PAT of ~INR80 crores remain unchanged. The tenancy target was revised from 12,000 to 8,500-9,000 by March, with the balance spilling into Q1/Q2 FY27, but inorganic growth is expected to fill the revenue gap.
• Inorganic growth in final stages: management is negotiating with 2-3 companies in Delhi and Rajasthan circles and expects to close deals soon, adding a few thousand sites with revenue upside from day one of acquisition.
• Data centre fibre project: a INR35 crore one-time EPC project providing fibre connectivity to data centre companies in Mumbai. Commercials are closed, agreements exchanged, and final confirmation is expected by end-November or mid-December. Revenue to be accrued by FY26 end, with execution split across Q3 and Q4.
• MTNL fibre tender: Suyog is L1 for ~1,000 km of aerial fibre in Mumbai Circle on an IP model with recurring revenue. The allocation letter is expected in 30-45 days, pending MTNL internal approvals.
• H2 growth drivers: (1) Airtel 5G deployment with minimal CapEx, (2) VIL rollout of ~1,000 sites in Q3-Q4, (3) inorganic acquisitions contributing revenue from day one.

Tushar Shah: "Most likely, if you wait for another one month up to December, we will be having the major announcements of the BSNL order which we will receive, followed by inorganic growth and Vodafone is anyways going very strong in rollout and Airtel 5G."

Margins, Funding & the Balance-Sheet Load

• EBITDA margin expanded to 75%, up 201 bps, driven by Airtel upgrades that require minimal CapEx. PAT margin, however, declined from 42% to 30% on higher interest and depreciation.
• Depreciation stepped up because of renewal of license agreements for existing sites over 10 years, with higher depreciation in the initial years of lease rental.
• Other income dropped due to a INR4 crore Vodafone reversal in the base quarter (Sep '24); no such reversal now as Vodafone payments are regular.
• Cash flow absorbed by BSNL preparation: other loans increased from INR6 crores to INR35 crores (given to the subsidiary IT company), and advances to vendors and suppliers were made to prepare for the BSNL order.
• CapEx mismatch explained: INR97 crores of CapEx in H1 was for 900+ sites, but only 150 sites were converted and integrated into tenancy. The remaining 702 sites are ready and await BSNL integration over 3-4 months.
• Funding plan for the rollout: INR700 crores needed for 7,000 towers over 12-15 months. INR250-300 crores is available; INR500 crores can be arranged via promoter funds (INR22 crores received in October), internal accruals, and debt. Equity dilution will follow as required.
• PAT margin commitment: management targets sustaining 30% PAT and 70% EBITDA overall, with 28%-29% PAT margin on BSNL revenue. The impact of higher debt on margins was acknowledged but not quantified.

Shivshankar Lature: "Now only Suyog is trying to maintain its own profit that 70% EBITDA and 30% net profit. We are trying to close that closer to our revenues."

Operator Mix & the Asset-Utilization Philosophy

• Revenue split target: Airtel 35%-40%, Jio 20%-25%, BSNL ~15%, VI ~30%. Management wants no single operator to dominate, a deliberate risk-management choice that also caps upside from any one carrier's rollout.
• Build-only-to-order model: Suyog does not roll out towers or fibre speculatively; it secures orders first, then deploys. This limits asset stranding risk but also means revenue recognition lags CapEx deployment, as seen with the 702 ready-but-unintegrated BSNL sites.
• Tenancy ratio stable: currently 1.2 between macro and small cell, expected to remain at that level.
• Fibre is a post-2030 story: management sees fibre contributing 10%-15% of total revenue only beyond 2030, as the industry remains fragmented with Jio at ~70% connectivity, Airtel at ~50%, and BSNL and Vodafone lower.

Tushar Shah: "As a company, we never do like we will rollout site first and then go for searching customer. As a company, we don't do that at all. First, we get the orders, then only we rollout the towers and fibre."

Guidance & Commitments

Key Metrics