ICRA Upgrades Telecom Tower Industry Outlook to Stable Amid Improved Payments

ICRA has upgraded the telecom tower industry's outlook to stable due to timely payments from key customers and clearance of past dues, improving the receivables cycle. The industry's debtor levels are projected to remain low, and operating income is expected to grow by 4-6% with healthy margins.

The Investment Information and Credit Rating Agency (ICRA) announced a revised outlook for the telecom tower industry, upgrading it from negative to stable. This change, announced on Monday, stems from timely payments by key customers and the clearance of overdue amounts, effectively improving the receivables cycle of these companies.

ICRA's assessment suggests an improvement in the financial health of telecom service providers, easing the working capital cycle for tower companies. Ankit Jain, Vice President and Sector Head of Corporate Ratings at ICRA Ltd, noted the reduction in receivable days to around 45-60 days, below the earlier negative outlook threshold of 80 days.

Looking ahead, ICRA anticipates that collections will continue to be prompt, sustaining lower debtor levels and reducing external debt. The demand for telecom services and data is expected to enhance network expansion, supporting the growth of the telecom tower sector with an operating income increase projected at 4-6% for FY2026.

(With inputs from agencies.)