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Friday, 16 October
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The people’s newsroom

EconomyCompanies

Tata Communications shares jump over 10% as quarterly profit rises 86%

Operating profit hit a record and losses in the digital business halved from the June quarter.

From the editorial desk · MumbaiPublished
Videsh Sanchar Bhavan, Tata Communications' head office in Mumbai
Videsh Sanchar Bhavan, Tata Communications' head office in MumbaiAam422 at English Wikipedia / Wikimedia

Key points

  1. Consolidated net profit rose 86% to ₹341 crore in July to September from ₹183 crore a year earlier.
  2. EBITDA rose 21% to ₹1,422 crore, lifting the margin to 21.3% from 19.2%.
  3. The shares rose more than 10% in Thursday afternoon trade.

Shares of Tata Communications jumped more than 10% on Thursday after the Tata group’s telecom and digital services company reported an 86% rise in quarterly profit and its highest ever operating profit.

Consolidated net profit for the July to September quarter came to ₹341 crore, up from ₹183 crore a year earlier. Revenue from operations rose 9.6% to ₹6,688 crore from ₹6,100 crore.

EBITDA, or earnings before interest, tax, depreciation and amortisation, rose 21% to ₹1,422 crore, which the company said was its highest ever. The EBITDA margin improved to 21.3% from 19.2%, and the net profit margin rose to 5.1% from 3%.

“Absolute EBITDA growth is a clear sign that our discipline and focus are paying off,” said Ganesh Lakshminarayanan, managing director and chief executive.

Digital business narrows losses

Revenue from the company’s digital platforms rose 18.6% from a year earlier, and its core data business grew 12.2%. Losses in the digital business roughly halved from the June quarter, with the segment’s margin at minus 3.6%.

For the first half of the year, net profit rose 27% to ₹475 crore and revenue 10% to ₹13,271 crore.

The board also approved moving the company’s shareholding in Kaleyra, Inc. to a wholly owned subsidiary in the Netherlands. The company said the change does not alter its ultimate ownership or economic interest.

On the NSE, the stock rose more than 10% to between ₹1,828 and ₹1,845 in afternoon trade, giving the company a market value of more than ₹52,000 crore. Promoters hold 58.86% of the company.