More Stories

Informist, Wednesday, Jan. 22, 2025

By Aman Aryan and Narayana Krishna

MUMBAI – While Tata Communications Ltd. is in line to achieve its revenue target by 2026-27 (Apr-Mar), it is subject to macroeconomic conditions, the company's management said in a post-earnings conference call. Tata Communications had set a revenue target of INR 280 billion by FY27. The management said the company has continued to invest in the right direction to meet that goal and has received good traction as of now. 

Like revenue, the company is also confident of achieving its earnings before interest, tax, depreciation, and amortisation margin target of 23-25% by FY27. Apart from this, the telecommunication company expects INR 8.50 billion of sales proceeds in the March quarter from land monetisation. So far, the company has been monetising its assets such as land for the last two years, the company's management said. 

On Wednesday, the company reported its consolidated net profit for the December quarter at INR 2.36 billion, up 4% sequentially. Its consolidated revenue rose just 1.2% sequentially to INR 57.98 billion in the quarter. While funnel additions were robust in Oct-Dec, deal closures were normal as compared to the previous two quarters, the management said. 

With the increasing focus on larger deals, the company is seeing an increase in its deal closure time, the management said. The company expects higher order wins in the cybersecurity vertical in the March quarter, the management said.  

While the rupee depreciation is a revenue accretive factor, forex volatility in the December quarter weighed on the company's net debt and return on capital employed. The company's net debt and return on capital employed are higher by INR 2 billion and 20 basis points, respectively, the management said, and added that the business does not benefit from rupee depreciation as both its income and costs are dollar-denominated. The company's net debt and return on capital employed are higher by INR 2 billion and 20 basis points, respectively, because of currency headwinds, the management said.

Volatility in the foreign exchange market and the subsequent currency headwinds can change the ratios, but not the company's financials, Tata Communication's management said during the conference call. Tata Communication still has enough levers to optimise its costs in cloud, security, and other businesses. For the December quarter, the company spent INR 4.86 billion cash as capital expenditure.  

The management said EBITDA margins of one of the company's subsidiaries, Tata Communications Transformation Services, have improved 800 bps on year. The management also said the company's indirect subsidiaries--Tata Communications Netharlands and Tata Communications UK--have been identified as the preferred holding companies for potential overseas acquisitions. 

On Wednesday, shares of the company closed at INR 1,677.95 on the National Stock Exchange, down 1.1%.  End

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.