Responding to the company’s September quarter financial performance, Tata Communications Ltd shares rose nearly 3% in opening deals on Thursday. Earnings were a mixed bag, with revenue growing lower than expected, while cost optimization measures and one-time profit assisted operating margins.
consolidated revenue stood on ₹4,170 crore, up 1.7% sequentially, but decreased 5.2% y-o-y (y-o-y), due to a decline in the voice business and moderation of collaboration traffic in the data business , which is a major growth driver for the company. Analysts said the sequential growth was due to sequential growth in the business and improvement in the data and voice segments.
EBITDA up nearly 13% sequentially ₹1,110 crore, beating analysts’ estimates, partly due to ₹50 crore in lump sum relating to employee expenses and reversal of provisions for doubtful debts. As a result, EBITDA margin increased 270 basis points to 26.7%. One basis point is one hundredth of a percentage point. Ebitda is short for earnings before interest, taxes, depreciation and amortization.
“normalized to lump sum benefit estimated above ₹50 crore, remained on Ebitda ₹1,060 crore (7.8% quarter-on-quarter), with a strong 150bp margin improvement of 25.5%,” analysts at Motilal Oswal Financial Services Ltd said in a report.
In addition, the company recorded significant growth in other income. ₹36.4 crore as compared to ₹13.4 crore in the previous quarter. As a result, its profit after tax increased 43% sequentially ₹420 crore, adjusted for exceptional items, profit after tax at Rs 410 crore, up 42% sequentially, ahead of analysts’ estimates.
On the other hand, its payment solutions business was hit hard by the second covid wave as the number of transactions stood at 56 for Q2 as compared to 64 in Q2FY21.
Meanwhile, its net debt fell ₹240 crore on sequential basis ₹7,760 crore despite ₹400 crore dividend payment in this quarter.
Don’t miss a story! Stay connected and informed with Mint.
download
Our App Now!!
.