Suyog Telematics Ltd Q4 FY2026 Concall Summary

Key Takeaways

• 18% growth in a quiet year: Revenue grew to ₹31,000 per tower despite no major industry-wide rollout, driven by BSNL billing commencement and Airtel upgrades.
• Vodafone is the FY27 story: A verbal commitment for a minimum of 5,000 sites from Vodafone, with official orders expected by June end, sets up a back-half-loaded year.
• BSNL is a free option, not a forecast: Management has factored zero BSNL orders into FY27 plans, citing unresolved Tejas network equipment issues and no confirmed timeline.
• Margins are structurally protected: EBITDA margin sustained at 74% and PAT margin at ~30%, with the low-rent BSNL mix diluting revenue per tower but not profitability.
• What to watch next quarter: Whether Vodafone converts its verbal 5,000-site assurance into a confirmed, funded order by June end, and any clarity on BSNL’s Tejas equipment resolution.

The Vodafone Catalyst

• Order visibility, not a tender: Suyog holds a pan-India master service agreement with Vodafone, so site allocation is direct with no bidding process. Management stated Vodafone’s planning head has verbally assured a large rollout.
• Scale of the opportunity: Vodafone has publicly declared a plan for 50,000 to 70,000 towers in the next 18 months, and wants to work with only the top 2 or 3 IP companies, with Indus taking the major chunk and Suyog likely second.
• Suyog’s self-imposed cap: Vodafone wants to allocate more than 5,000 sites, but Suyog is demanding only 5,000 based on its available financials and execution bandwidth, a conservative posture that limits upside but also risk.
• Timing and seasonality: If orders arrive by June end, deployment begins in Q2 but will be muted by the rainy season, with the bulk of revenue recognition shifting to Q3 and Q4. The full-year benefit of FY27 rollouts will only materialize in FY28.
• Funding gated on order confirmation: No debt or equity plan has been finalized. Management will decide between internal accruals and additional borrowing only after the confirmed Vodafone order is in hand, with a detailed plan promised by the next quarterly call.

Tushar Shah: "As of now, they have confirmed that there will be a minimum of 5,000 sites from Suyog. That's what we are -- actually, they want to do more, but we are demanding 5,000 based on our financials available."

BSNL: Low Rent, High Uncertainty

• Why BSNL depresses revenue per tower: BSNL rentals are capped at approximately ₹7,000 per site versus ₹15,000 to ₹25,000 for private operators, so a high BSNL mix drags blended revenue per tower down even though PAT percentage remains the same.
• Revenue share is tiny despite volume: BSNL contributed only 2.5% of revenue despite 1,800 sites rolled out over two years, and billing for 189 sites is still pending.
• The Tejas bottleneck: BSNL’s 4G rollout uses indigenous Tejas network equipment rather than Nokia or Ericsson, and is facing challenges with backhauling and SIM latching. Management has no visibility into resolution timelines because Suyog is not party to the Tejas-BSNL transaction.
• Not in the FY27 plan: Management is factoring zero BSNL orders for FY27. If BSNL does confirm orders, the previous target of 17,000 exit tenancies remains achievable, but until then, the base case is 12,000 to 13,000 exit tenancies.

Tushar Shah: "We are nowhere involved in the entire transaction of Tejas to BSNL. So, we can't commit any timeline because we are ourselves not aware."

Revenue Quality & Tower Economics

• Revenue per tower recovery: Blended revenue per tower improved from ₹29,000 to ₹31,000 in FY26 as billing commenced on previously unbilled BSNL sites and Airtel upgrade revenue kicked in. Management expects to sustain ₹31,000 to ₹32,000 in FY27.
• Growth composition: Per an analyst’s math, approximately 45% of FY26 growth came from BSNL billing starting for 120 to 125 sites, with the balance from Airtel upgrades and new Vodafone rollouts.
• Margin structure is tower-agnostic: Gross margins run at 85% per tower, and the low-rent BSNL mix does not hurt PAT or EBITDA margins. If BSNL rollout accelerates, revenue per tower could dip by ₹1,000 to ₹2,000 with no profit impact.
• Airtel as a steady anchor: Airtel sustained at 48% of revenue, driven by upgrade business. Each additional technology layer (2G to 3G to 4G to 5G) adds ₹3,000 to ₹4,000 in incremental revenue per upgrade.
• Landlord rent is a pass-through: The entire rent paid to landlords is reimbursed by the operator, so it is not Suyog’s cost and does not pressure margins.

Operational & Accounting Mechanics

• Ind AS 116 distorts the P&L: Lotus Tele Infra’s growth is not visible because all rental agreements exceed 10 years, causing high depreciation and interest costs under Ind AS 116 despite zero actual debt. Profit will become visible after two years.
• Monorail renewal flatters EBITDA: The Monorail contract was renewed for 10 years, shifting government rent from COGS to depreciation and interest, which reduced COGS and expanded EBITDA margin as a percentage despite flattish revenue.
• Interest cost is partly non-cash: The rise in interest costs reflects both Ind AS 116 right-of-use interest and actual loan interest at around 9%, so the reported figure overstates cash interest burden.
• Internal controls being upgraded: With a planned doubling of site count from ~7,000 to ~12,000, the auditor recommended stronger internal controls. Suyog is deploying software for billing, rental payment, and warehouse management.
• EB billing to move above the line: Management plans to add electricity billing to the top line in the current quarter, citing compliance and accounting requests, which will optically increase reported revenue.

Adjacent Bets: Fiber, Renewables, Acquisitions

• Fiber is a future story: Suyog procures fiber, lays it, and sub-leases it to operators on a recurring model. Revenue will be negligible in FY27 (under 2% to 3%) and is expected to materialize only in FY28 to FY29, when operators shift focus from massive rollout to network quality.
• Renewable energy posture: Suyog claims to be ahead of Indus on green energy, with only 2 DG sites across the network and all sites connected to the electricity grid. Solar is not being pursued because sites are in metros with high grid availability and the ROI is unattractive for the small 5 to 10 kWh per site requirement.
• Battery technology shift: The company moved from VRLA to lithium batteries a year ago, a technology upgrade that likely improves site reliability and reduces maintenance.
• Acquisition exploration: Management is exploring a new acquisition, to be funded through internal accruals if it is a smaller IP company. No size or target has been disclosed.
• Data centre on hold: No progress on the data centre business, as Jio has paused CapEx until its IPO, Airtel is not undertaking major CapEx, and Vodafone is focused on tower rollout. Management remains hopeful for the next few years.

Guidance & Commitments

Key Metrics