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Informist, Wednesday, Oct. 15, 2025

 

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--Tata Comm: Seeing strong progress in strategic bets 
--CONTEXT: Tata Comm mgmt's comments in post-earnings analyst concall 
--Tata Comm: Demand in data centre capacity space growing 
--Tata Comm: Q2 order book flattish, large deals lumpy in nature 
--Tata Comm: Seeing increased traction in security transformation deals 
--Tata Comm:See security transformation unit grow mid-to-high teens for year 
--Tata Comm: Some delays in conversion affected Q2 digital revenue 
--Tata Comm: AI given a tailwind in the data centre capacity space

 

By Shakshi Jain and Rajesh Gajra

 

NEW DELHI – Tata Communications Ltd. has seen growing demand for data centre capacity and is betting on steady growth in the core connectivity business, a top company official said Wednesday in a post-earnings conference call with analysts. "We think in the next five years, the data centre capacity will double. And, we are very well positioned as a leader in the data centre connectivity space, because it requires a ...highly reliable, resilient, low latency capability."

 

He added that artificial intelligence has provided a fillip for the data centre capacity space, and the company aims to fully maximise the opportunity. Tata Communications is exploring data centre to data centre connectivity options to be delivered internationally as the company believes "large enterprises will want a lot of private cloud solutions."  

 

The company's official said people are investing in data centres specifically for artificial intelligence. Over time, people would be in "multi cloud" and Tata Communications has rolled out a product for that, he added. "We probably will be a very unique player that will offer both site-to-cloud and to network within the cloud, and that is one of the strategic bets." 

 

In the September quarter, the company's consolidated revenue rose over 2% on quarter to INR 61 billion. Its consolidated net profit, however, fell nearly 4% on quarter to INR 1.83 billion.

 

The top line in the September quarter was supported by strong growth in sales from its largest segment, data services, which include its digital portfolio and core connectivity business. Revenue from the segment rose 1% on quarter to INR 52.04 billion in Jul-Sept. Revenue from the data services segment's core connectivity business rose nearly 1% sequentially to INR 26.37 billion. Revenue from the segment's digital portfolio business also rose 1% on quarter to INR 25.42 billion.

 

The management said there were some delays in terms of the company's digital portfolio revenue in the September quarter. Some revenue conversions "got pushed to the next quarter," the management added. 

 

The company's net debt at the end of the September quarter was INR 113.2 billion, according to the management. This was higher than INR 101.2 billion at the end of the June quarter. The company did not expect the increase in net debt, the management said. Forex had an adverse impact on net debt. The net debt increase was driven by dividend payments of INR 7.3 billion and continued investments in ST Telemedia to maintain its stake in it, it said. The finance costs of the company rose 14% on quarter to INR 2 billion during the September quarter. 

 

On the order book, the management said the first half of the year was "somewhat low" on a year-on-year basis but enterprise-based order booking remains robust. "...as we go into larger deals, they are a little bit lumpy in nature," it said.

 

Going forward, among the different categories, Tata Communications is bullish on cloud and security. According to the management, the company is seeing increased traction in security transformation deals, particularly tied to next generation security operations centre and network connectivity. "We remain confident of achieving mid-to-high teens growth in this segment for the year," the management said.

 

Overall, the management said the company is seeing progress in its strategic bets. "As we enter the second half of the fiscal, we expect our strategic bets to further enhance profitability and margin strength," Chief Financial Officer Kabir Ahmed Shakir said in a press release. 

 

Shares of Tata Communications closed over 4% higher Wednesday at INR 1,955.10 on the National Stock Exchange. The company detailed its financial results during market hours.  End

 

Edited by Subhojit Sarkar and Akul Nishant Akhoury

 

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