Tata Communications Q1 net profit falls 13% to Rs 333 crore, revenue up 18%

Tata Communications Limited on July 11 reported a 12.8 percent fall in consolidated net profit at Rs 333 crore for the quarter ended 30 June, 2024. The company had reported Rs 382 crore in the year-ago period.

The revenue rose 18.1 percent year-on-year to Rs 5633 crore.

The data business revenue stood at Rs 4694 crore, an increase of 20 percent per cent over the same period the previous year.

Digital Portfolio revenue grew by 51.5 percent YoY, accounting for 45.7 percent of data revenue. The company’s consolidated EBITDA rose by 9.8 percent YoY to Rs 1124 crore, and margins expanded to 20 percent

AS Lakshminarayanan, MD and CEO of Tata Communications, said: “We are pleased to announce a strong and positive start to FY25, with our quarterly performance indicators showing promising results. We remain bullish about the market opportunities, and with our expanded product capabilities and increasing customer relevance, we are confident in our ability to achieve our medium-term growth objectives.”

Kabir Ahmed Shakir, Chief Financial Officer of Tata Communications, said the company’s “financial prudence, anchored in our ‘Fit to Grow’ framework”, has yielded profitable growth and delivered margin expansion this quarter.

“As our products continue to gain traction and scale, we anticipate operating leverage, positioning us to achieve our margin aspirations in the medium term,” he added.

Analysts expected Tata Communications’ revenue to grow ~1% quarter-on-quarter, primarily led by a 2.5% growth in the Data segment. They expected PAT to decline 39% QoQ to Rs 2.3 billion due to lower Other income.

Digital platforms and Services revenue was expected to grow ~4% QoQ. IIFL said in a note that organic EBITDA margins would largely remain flat QoQ and EBITDA would grow 4.3% QoQ since the base quarter had a few M&A-related one-offs.

Tata Comm said that its board approved the proposal to raise funds by issuing Non-Convertible Debentures (‘NCDs’) on a private placement basis up to Rs 2,000 Crores.

The board also approved the proposal to invest in its step-down wholly-owned subsidiary, Tata Communications (UK) Limited (TC UK). The proposed investment is intended to simplify the existing group structure of the Company and its subsidiaries by moving TC UK under direct ownership without any change in its ultimate ownership and beneficial economic interest in TC UK.