Tata Communications Q2 profit slides 64% to Rs40 crore
New Delhi: Tata Communications on Tuesday reported a dip of 64% in its consolidated net profit at Rs40 crore for the September quarter, mainly due to impairment charges on its investment in South Africa-based firm Neotel.
The company had posted a net profit of Rs112.27 crore in the same period a year ago. Tata Communications incorporated Rs125 crore as exceptional loss item. “Rs125 crore was an impairment on investment in Neotel,” it said in a note. The company also incorporated impact of its data centre business.
Tata Communication sold 100% stake in its data centre business in Singapore and 74% stake in India data centre business to ST Telemedia for SGD 232.4 million and Rs3,130 crore, respectively. The total income from operations of the company declined marginally to Rs4,509.09 crore during the reported quarter from Rs4,541.45 crore a year ago.
The data business of Tata Communications grew by 12% to Rs2,571.7 crore from Rs2,293.33 crore. The payment solution business of the company grew by 10% to Rs152.55 crore from Rs138.59 crore during the period under review.
“Tata Communications continues to contribute to the digital transformation journey of global businesses. The second quarter enterprise revenue has grown by over 24% on a year-on-year basis and as we continue to increase the momentum of our data product portfolio, we are well positioned to grow and perform going forward,” Tata Communications MD and CEO Vinod Kumar said.
However, the company saw a decline of 15% in revenue of its voice business to Rs1,785.8 crore from Rs2,111.29 crore a year ago.
“With continued focus on driving operational efficiencies, we have generated healthy free cash flows of Rs794 crore for core business in first half of the year. We are focused on strengthening our balance sheet and setting the stage for healthier return ratios,” Tata Communications CFO Pratibha K Advani said.
Shares of Tata Communications closed 0.68% up at Rs611.15 on BSE.