Suyog Telematics Limited

Suyog Telematics reported Q4 FY25 revenue of INR 50 crores. Excluding a one-time^📎 notional ESOP impact of INR 27 crores, the company achieved an EBITDA margin of 71.4% in Q4, an 853 basis point improvement year-on-year from 62%. For the full FY25, the EBITDA margin (ex-ESOP) stood at 46.5% (up from 41.5% YoY), and the net profit margin was 35.3%, aligning with the target range of 32-35%. The company also generated a positive cash flow of INR 211 million in FY25, a significant increase from INR 14.8 million in the previous fiscal year.

The reported net profit for Q4 FY25 was negative due to a notional INR 27 crore ESOP impact, which represents the difference between the exercised rate and fair value, as per accounting policy. Management clarified this is a one-time^📎, non-cash event. Additionally, INR 24 crores of revenue billing for FY25 remains pending, comprising INR 19 crores from BSNL, INR 4 crores from Airtel's fiber team, and INR 7.9 million from Airtel/Voda-Jio, despite contractual obligations being fulfilled. This pending billing is expected to be realized in subsequent quarters.

A key highlight of the year was the acquisition of Lotus, completed on March 31, 2025. This acquisition strengthens Suyog's presence in Delhi, adding an estimated INR 15-16 crores to consolidated revenue, along with 120 sites and 140 tenancies. The company aims to add another 50% of tenancies to the Lotus portfolio in the coming quarter. This move positions Suyog as a strong player in both the national and financial capitals of India. The acquisition resulted in INR 10 crores of goodwill.

Suyog Telematics plans a capital expenditure of INR 500 crores for FY26, targeting the rollout of 5,000 new towers. Funding for this is expected from INR 100 crores in bank debt (INR 70 crores already received, INR 30 crores in pipeline for Q1 FY26), INR 150 crores from internal accruals, and INR 50 crores from promoter warrants/ESOP. The remaining INR 200 crores is actively being sought. The company's total debt for FY25 stands at INR 225 crores, with a cost of debt at 9.5% for a 5-year tenure.

Management highlighted improved operational efficiency, with the cost of material decreasing to 10.11% in FY25 from 10.49% previously. The company is addressing the auditor's emphasis of matter regarding internal controls by focusing on automation for invoicing and sales, aiming to transition from manual processes. They assert that their in-house internal finance control is robust, and the remark primarily pertains to system automation rather than fundamental control issues.

BSNL is emerging as a critical customer, with a central directive issued to all circle offices to transfer non-performing IP company sites to Suyog. This is expected to lead to a 'huge jump' in BSNL business across India. The new RoW (Right of Way) guideline, mandating single-window clearance via the Gati Shakti portal with a 30-day deemed approval process, is anticipated to significantly benefit IP companies like Suyog by standardizing charges and streamlining approvals.

Suyog targets achieving 10,000 total towers and 15,000 tenancies by the end of FY27, with 5,000 new towers planned for both FY26 and FY27. The company expects to reach a tenancy ratio of 1.5 by FY26 and increase average revenue per tenant per month from INR 29,000-30,000 to INR 32,000-33,000 in FY26 due to macro site rollouts. For FY26, the company guides for a top line of INR 320 crores, sustaining EBITDA margins at 62-65% and PAT margins at 32-35%. The company also plans to participate in a new INR 3,000 crore EPC tender from BSNL by June end.