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Informist, Wednesday, Jan. 21, 2026

By Arya S. Biju and Nandini Sinha

MUMBAI – Tata Communications Ltd. expects the earnings before interest, tax, depreciation, and amortisation of its digital portfolio business to break even in the near to medium term with the company focusing on bringing its customer interaction suite and media businesses into the black, the company's management said in a post-earnings call with analysts Wednesday. The company also remains confident about achieving double-digit EBITDA margin in the digital portfolio business as mentioned in its investor meet in June, the management said, without giving a timeline.

In the December quarter, revenue from the digital portfolio business increased 4.6% sequentially and 15% on year to INR 26.59 billion. The growth was driven by international, and cloud and security businesses on the back of some large deals and "usage-driven seasonality," a top company official said in the call. Revenue from this segment accounted for around 50% of the company's data services vertical sales in the reporting quarter.  

Within the digital portfolio business, Tata Communications expects the customer interaction suite business to see double digit growth. Going forward, the company aims to expand beyond the short message service channel under the customer interaction suite business as its margins are "still not very good," a company official said. "So we are launching the voice, RCS (rich communication services)... All of these have been launched in different markets and we are seeing good progress being made," the official said.

Among other businesses under the digital portfolio business, the company expects its media business to have "excellent potential to grow." However, the segment had seen a slowdown in the December quarter mainly on account of the conclusion of world athletics which was a fairly large contributor of its revenue. "But overall in the long run, we think that could grow," a top company official said. The company is also seeing good traction in its next-generation connectivity business.

The core connectivity segment under the company's broader data services vertical reported a revenue of INR 27 billion, up 0.4% on quarter and 4.2% on year. "The revenue growth in core (connectivity segment) is driven by the implementation of more than half the large hyperscale and DCDC (data centre to data centre) connectivity deals that we announced earlier," a company official said. The company also saw an uptick in internet-related core connectivity products in the December quarter, the management said.

On orderbook, the company said it had an "an excellent order book" in the December quarter with a double-digit sequential and year-on-year growth. "A large part of this order book growth comes from core connectivity on the back of a deal with one of the largest OTT (Over-the-Top) content providers," the management said.

Further, the upward trajectory seen in the company's EBITDA margin since the March quarter of 2024-25 (Apr-Mar) and the 110 basis points improvement in EBITDA margin over the past three quarters reflects the inherent momentum to reach its medium-term EBITDA margin guidance of 23-25%, Tata Communications said. In the December quarter, the company's EBITDA margin improved 60 bps to 19.8% from 19.2% reported in the trailing quarter. 

The company announced its December quarter earnings earlier in the day. Its consolidated net profit for the December quarter nearly doubled sequentially to INR 3.65 billion, beating analysts' expectation of INR 2.89 billion. The bottom line was impacted by a one-time cost of INR 767.8 million, which included an INR 609.8 million pertaining to the statutory impact of the new labour codes, which came into effect in November and INR 158 million due to staff cost optimisation. Excluding the one-time cost, the company's net profit would have been INR 4.42 billion, more than double the net profit of INR 2.04 billion it would have reported for the September quarter if one-time costs during that period were excluded.

The company's consolidated revenue for the quarter rose 1.5% sequentially and nearly 7% on year to INR 61.89 billion. However, the top line failed to meet the Street's view of INR 62.54 billion. After the earnings announcement, shares of the company closed Wednesday's session around 6% lower at INR 1,617.80 on the National Stock Exchange.  End

Edited by Ashish Shirke

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