Tata Communications’ January-March net profit jumps to ₹321.52 crore

  • For the full year, consolidated revenues jumped 17.5% to 20,969 crore, while data revenue crossed the 17,000-crore mark, rising 21.9%. However, profit nearly halved to 969.6 crore for FY24, from 1,800 in FY23 due to higher expenses at its overseas businesses.

Gulveen Aulakh
First Published17 Apr 2024
For the full year, consolidated revenues jumped 17.5% to  <span class='webrupee'>₹</span>20,969 crore, while data revenue crossed the  <span class='webrupee'>₹</span>17,000-crore mark, rising 21.9%.
For the full year, consolidated revenues jumped 17.5% to ₹20,969 crore, while data revenue crossed the ₹17,000-crore mark, rising 21.9%.

Tata Communications’ net profit for the quarter ended 31 March surged to 321.52 crore, from 45.1 crore in the previous quarter, but was down 1.5% from 326.42 crore in the same quarter a year ago.

Consolidated revenue for the quarter rose 24.6% year-on-year to 5,692 crore. Of this, data revenue rose 26.9% to 4,656 crore. Earnings before interest, tax, depreciation and amoritsation (Ebitda) rose 2% to 1,056 crore, but margins declined to 18.6% from 22.6% a year ago. Profit margins also slipped 156 basis points to 5.6% for the quarter ended March.

For the full year, consolidated revenues jumped 17.5% to 20,969 crore, while data revenue crossed the 17,000-crore mark, rising 21.9%. However, profit nearly halved to 969.6 crore for FY24, from 1,800 in FY23 due to higher expenses at its overseas businesses. The company's board recommended a dividend of 16.7 per share.

Macro-economic headwinds due to conflicts and unrest in some parts of the world could potentially impact business. “While our funnel is good, the conversion is taking more time because our customers are cautious. With the conflict happening, the cautiousness will only increase. But despite the headwinds in the international markets, we’ve seen growth, albeit on a smaller base,” MD and CEO A S Lakshminarayanan said in an interaction with Mint following the results.

Margin pressures are likely to continue as the company was integrating its global acquisitions and was also spending on the operations overseas to turn them around, he added.

“We’ve invested in our platforms organically. We've also invested inorganically through a couple of large acquisitions, and people have translated into a full year of costs for us,” he said. He added that the costs are likely to remain on the higher side since the company intended to increase its reach in the international markets following the acquisition of The Switch and Kaleyra.

“Our reach in international markets is very small, even though 50% of our revenue comes from international markets, and we have to do a lot more work to improve our reach and with feet on street. So those investments will continue,” he said.

He added that the non-profitable subsidiaries that were dragging the margins have to be turned around. It has also exited some non-profitable contracts. The Switch and its existing business combined will become profitable this year while Kaleyra acquisition merged with the business in the US is expected to turn profitable in two years.

He said that while plans for private 5G were not on the back burner with some proof of concepts already done for customers, the correct pricing for leasing spectrum from telcos for private 5G has to be determined.

“It has to all come together, giving spectrum at the right price points, government allowing enterprises to get spectrum directly, when will they (telcos) be ready and more importantly, the customers readiness,” he said.

The company added that during the quarter ended March 2024, it received show cause-cum-demand notice for FY23 aggregating to 77.65 crore. Separately, it said that one of its subsidiaries had issued a termination notice to a customer – alluding to Vodafone Idea without naming it - and was in discussion on disengagement transition plan.

The carrying amount of trade receivables (including unbilled revenue and net of provisions) was 235.10 crores and 171.50 crore as on March 31, 2024 and March 31, 2023 respectively. “The Group believes that the balance is good and recoverable basis its on-going interactions with that customer,” the company added.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeIndustryTelecomTata Communications’ January-March net profit jumps to ₹321.52 crore

Most Active Stocks

Ashok Leyland

210.55
10:29 AM | 24 MAY 2024
-1.85 (-0.87%)

Bharat Electronics

297.10
10:28 AM | 24 MAY 2024
8.7 (3.02%)

GAIL India

204.40
10:29 AM | 24 MAY 2024
3.95 (1.97%)

Tata Steel

174.80
10:29 AM | 24 MAY 2024
-0.65 (-0.37%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Inox Wind

164.20
10:21 AM | 24 MAY 2024
13.25 (8.78%)

BHARAT DYNAMICS ORD

1,527.50
10:22 AM | 24 MAY 2024
120.8 (8.59%)

Amara Raja Energy & Mobility

1,209.10
10:17 AM | 24 MAY 2024
94.85 (8.51%)

Vodafone Idea

15.11
10:29 AM | 24 MAY 2024
1.06 (7.54%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,829.00577.00
    Chennai
    73,325.00-1,008.00
    Delhi
    73,252.00-433.00
    Kolkata
    73,469.00-432.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.88/L0.13
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumFor youGet App