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Informist, Wednesday, Apr. 23, 2025

By Arya S. Biju

MUMBAI – Tata Communications Ltd. will continue strategic initiatives to streamline its portfolio going forward, including monetisation of land parcels and a review of non-core assets and subsidiaries, the company's management said in a post-earnings analyst call Wednesday. The company has some large land parcels in the northern part of the country, which it expects to monetise in the future, the management said.

On Tuesday, the company reported a four-fold jump in its bottom line for the March quarter, boosted by a one-time income of INR 5.78 billion. The one-time income was the net proceeds of INR 6.60 billion from the sale of its properties, including one in Chennai's Ambattur, after accounting for an expense of INR 820.5 million on account of staff cost optimisation, the company said in a press release.

The company has made remarkable progress on multiple strategic interventions that were outlined in 2024-25 (Apr-Mar), including divestment of its wholly-owned subsidiary, Tata Communications Payment Solutions Ltd., land monetisation, and improving the profitability of Tata Communications Transformation Services, Kabir Ahmed Shakir, chief financial officer said.   More

Tata Communications faced a customer-specific issue during the March quarter, which hit both its top line and bottom line. It also hit the company's earnings before interest, tax, depreciation, and amortisation margin for the quarter, Shakir said. The company reported an EBITDA margin of 18.7% for Jan-Mar, down 33 basis points on year. Margins for the March quarter were also impacted because of spillover of cable repair costs and marketing investments, the company's chief financial officer added.

For the financial year ended Mar. 31, Tata Communications' EBITDA margin was 19.8%, down 100 bps from the previous year. This was because of increased provisions made in some regions impacted by geopolitical factors, the management said.

On the impact of US tariff-led macroeconomic uncertainty, the company said it has not been directly affected by tariff woes and has not seen any major reactions or cancellations. Some of its deals, which were expected to be closed in the March quarter, were rolled over to the June quarter, but it was not attributable to the macroeconomic conditions, the management said. "It's just a matter of delays," said A.S. Lakshminarayanan, managing director and chief executive officer of the company. However, the company will remain cautious about the macroeconomic environment and will continue to monitor the situation, he added.

On the order book front, the company said the first half of the financial year ended Mar. 31 was "good" with its order book increasing substantially in comparison to previous years. In the Oct-Mar period, the company's order book came back to its normal levels, Tata Communications said. For the full year, the company's order book grew above teens compared with the previous year.

The telecom company Tuesday reported a consolidated net profit of INR 10.40 billion for the March quarter, beating analysts' expectations of INR 3.21 billion by a wide margin. The company's top line for the quarter was INR 59.90 billion, up 3.3% on quarter. Analysts expected a consolidated revenue of INR 59.73 billion. On Wednesday, shares of Tata Communications closed at INR 1,584.40 on the National Stock Exchange, down 1% from the previous close.  End

Edited by Nishant Maher

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