Indus Towers Faces LPG Supply Challenges Amid West Asia Conflict

Indus Towers, a subsidiary of Bharti Airtel, has raised concerns about supply chain risks stemming from the ongoing conflict in West Asia. The company highlighted that disruptions in the supply of liquefied petroleum gas (LPG), essential for manufacturing processes, could hinder tower production, delay rollouts, and escalate costs.

Prachur Sah, the managing director and CEO, noted that while the company has a robust order book for the upcoming quarters, the current market conditions are creating tightness in tower supplies due to LPG availability. Indus Towers is actively monitoring the situation and implementing measures to mitigate potential impacts.

LPG is crucial for heating steel components, which are then coated with zinc to prevent corrosion and prolong the life of the towers. Any disruptions in LPG supply could lead to a slowdown in production and subsequent delays in network rollouts.

Additionally, mobile towers depend on diesel generators during power outages. With diesel prices fluctuating, any increase in costs could directly affect operating expenses. However, these costs are typically transferred to telecom operators, including Airtel, Jio, and Vodafone Idea.

Sah explained that changes in retail diesel pricing could equally impact both revenue and costs, with a slight effect on net margins. In the fiscal year 2026, fuel and power expenses for Indus Towers amounted to ₹11,996 crore, representing 37% of its total revenue of ₹32,493 crore.

In the latest quarter, the company reported a 4.8% year-on-year increase in revenue from operations, reaching ₹8,101 crore, while net profit rose by 0.8% to ₹1,793 crore. The total number of towers increased to 264,514, with 4,892 added sequentially and 15,209 year-on-year.

Customer Dynamics

Indus Towers counts Vodafone Idea among its largest clients. Sah expressed optimism regarding the gradual improvement in Vodafone Idea's financial position, aided by government support, which could foster strong business momentum.

As of the end of March, the company reported trade receivables of ₹4,939 crore, with a significant portion attributed to Vodafone Idea.

Expansion Plans in Africa

The company is also making strides in its expansion into Africa. In Zambia, it has secured an operating license and is moving forward with execution. Regulatory approvals are in the final stages for operations in Uganda and Nigeria, with tower rollouts expected to commence soon.

Sah indicated that commercial frameworks are largely established with primary customers, and initial orders have been placed. The company is also enhancing its supply chain ecosystem and operational capabilities to ensure efficient deployment.

Indus Towers anticipates that its capital expenditure for its African ventures could range between $200 million and $300 million, with a balanced mix of debt and equity planned for its capital structure.