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Informist, Thursday, Jul. 17, 2025

By Simran Rede

MUMBAI – Tata Communications Ltd. reported weak earnings for the June quarter as its bottom line slumped 82% on a sequential basis, recording the steepest fall in at least 19 quarters. On the other hand, the top line declined for the first time in four quarters and was down 0.5% on quarter.  

This sharp fall in the company's consolidated net profit was mainly due to a higher print in the March quarter on the back of a one-time gain. The metric fell 43% on a year-on-year basis. The telecommunications company posted a consolidated net profit of INR 1.90 billion in the June quarter, sharply below the analysts' estimate of INR 2.94 billion. 

Its consolidated revenue fell 0.5% on quarter to INR 59.60 billion, but rose nearly 7% on year. Analysts had expected the revenue to grow a little over a percent on quarter to INR 60.66 billion in the reporting quarter.

The decline in Tata Communications' net profit was on the back of a sharp fall in its other income and rise in employee costs. The other income fell over 75% on quarter to INR 171 million from INR 688 million in the previous quarter. The company incurred INR 12.18 billion as expense for employees, which rose over 7% on quarter.

The company's network and transmission expenses, which contributed over 48% to the total expenses, rose 0.6% on quarter and nearly 16% on year. On the other hand, an over 14% sequential decline in the company's other expenses supported the net profit from falling further. Other expenses fell to INR 8.76 billion in the quarter, dropping nearly 10% on year.  

Depreciation and amortisation expenses fell just over 1% on quarter to INR 6.66 billion, while its finance costs for the quarter fell over 3% to INR 1.77 billion. The company also reported a tax expense of INR 654.30 million for Apr-Jun, down 63% on quarter. 

Its consolidated earnings before interest, tax, depreciation, and amortisation for the quarter was unchanged on year at INR 11.37 billion. This was, however, slightly below analysts' expectations of INR 11.61 billion. The company's EBITDA margin for the quarter was 19.1%, down 125 basis points on year. The net profit margin for the quarter fell 248 basis points on year to 3.9%. 

Revenue from the company's data services segment, which includes core connectivity services and digital platforms and connected services, rose 0.6% on quarter to INR 51.52 billion in the June quarter. The data services segment contributed over 86% of the total sales of the company. Its voice solutions sales, on the other hand, rose over 5% on quarter to INR 3.95 billion. The revenue from its transformation services fell over 29% on quarter to INR 2.24 billion. 

The company announced its Jan-Mar earnings after market hours on Thursday. Along with the financial results, the company also approved raising up to INR 10 billion through the issuance of non-convertible debentures on a private placement basis. The board also approved an intra-group share purchase agreement to fully acquire its step-down wholly-owned subsidiary, Solutions Infini Technologies (India) Pvt. Ltd. from Kaleyra S.P.A. for an aggregate fair value consideration of INR 1.24 billion. Shares of the company closed at INR 1,731.60 on the National Stock Exchange, up 0.4% on Thursday.  End

Edited by Vandana Hingorani 

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