March 03, 2026 (MLN): The completion of the Deodar portfolio acquisition has expanded Engro Holdings Limited’ telecom infrastructure footprint to 15,012 towers, marked a significant scale-up in Pakistan’s tower sector as operators push for higher tenancy ratios and cost efficiencies.

The company finalized the Deodar deal on June 3, 2025, adding 10,617 towers to its existing portfolio, according to the press release. 

The transaction is being financed through a 65:35 debt-to-equity structure, increasing leverage but strengthening recurring infrastructure assets at a time when telecom operators are focusing on network expansion and cost optimization.

As of December 2025, the tenancy ratio stood at 1.25x for the Enfrashare portfolio and 1.3x for the Deodar towers.

Management is targeting a long-term blended tenancy ratio of 1.8–1.9x, which, if achieved, would significantly enhance revenue per tower and operating margins in Pakistan’s telecom infrastructure market.

Going forward, the company plans to add approximately 400–450 towers annually, subject to market conditions. The average cost of constructing a new tower is estimated at Rs10m, while solarization increasingly critical amid rising energy costs requires an additional Rs2–2.5m per tower.

On the taxation front, management indicated a total super tax outflow of Rs14bn. However, after refunds and adjustments, the net cash impact is expected to ease to Rs8–9bn, reducing immediate liquidity pressure.

Addressing concerns around proposed taxation on the CPP component of IPPs, management said it does not foresee any adverse financial implications, citing the absence of legal grounds for such a move.

Separately, Engro Holdings Limited reduced its shareholding in Engro Polymer & Chemicals Limited from 68.69% to 50.36%, while maintaining that it has no plans for further dilution.

Meanwhile, SECMEC Phase III is expected to commence operations by 3QCY26 or early 4QCY26, potentially adding to earnings diversification over the medium term.

The Deodar acquisition positions the company as one of the larger independent tower operators in Pakistan, with scale advantages that could support higher tenancy ratios, improved cash flows, and better resilience amid sector consolidation and rising energy costs.

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