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Informist, Wednesday, Jul. 22, 2026

 

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--Tata Comm: Network, digital ops to drive EBITDA growth 
--Comments by Tata Comm's management in post-earnings analyst call 
--Tata Comm: Aim to take solutions to market, customers faster 
--Tata Comm: Customer wins continue to be robust 
--Tata Comm: Continue to see momentum from global capability center customers 
--Tata Comm: Market rewarding companies that simplify complexities 
--Tata Comm: Digital portfolio seeing better profitability across the board 
--Tata Comm: Media segment impacted by cancellations of sporting events Q1 
--Tata Comm: Seeing green shoots of profitability across digital portfolio 
--Tata Comm: Expect right business mix, sales growth to help EBITDA rise FY27 
--Tata Comm: Order book continue to be robust, demand environ getting better 
--Tata Comm: All graphics processing units sold out, seeing supply strain now 
--Tata Comm: AI increasing traffic flowing between data centres 
--Tata Comm: Will keep investing in data centre to data centre connectivity 
--Tata Comm: Improving profitability near-term goal for digital business 
--Tata Comm: Network, cloud, next gen ops doing well in digital portfolio 
--Tata Comm: Target capital discipline but will not shy away from investment 
--Tata Comm: Near-term goals harvesting investments, driving profitability 

 

By Arya S. Biju and Shakshi Jain 

 

MUMBAI/NEW DELHI – Profitability in the loss-making digital portfolio will be the near-term goal for Tata Communications Ltd., the management told analysts in a post-earnings conference call Wednesday. The company is seeing green shoots of profitability across the board in the digital portfolio, the management said, reassuring it that it is on the right track, Ganesh Lakshminarayanan, managing director and chief executive officer, said.

 

During the quarter ended June, the digital portfolio segment saw a normalised EBITDA margin of (-)6.9%, a significant improvement from the earlier period, the management said. Within this, network, next-generations, and cloud businesses are "doing very well", a top company official said, adding that these are segments that the company continues to be confident about. Meanwhile, the company needs to spend more time and ensure better profitability in segments like media, he added.

 

In the June quarter, the media segment was affected by cancellation of multiple sporting events following the outbreak of war in West Asia, the management said. The company also plans to change the business mix of its digital portfolio to improve profitability. "I think it's a question of getting the (business) mix right, getting the operating leverage in, and then getting the sales team to focus on the higher profitable portion of that (digital) portfolio," a top company official said. 

Overall, the company aims to deliver double-digit reported EBITDA growth in the financial year 2026-27 (Apr-Mar). "The network business is the most profitable business we have in our portfolio and that will drive EBITDA growth," Lakshminarayanan said. "We will increase the mix of our platform business. The most exciting platforms we have which is Threadspan, the Commotion, our Move platform. These are the right areas for us to accelerate which will again help us on EBITDA growth. In my visits, one thing that has become very clear is the market is placing a premium on platforms that simplify the complexity for enterprises, makes the infrastructure programmable, not provisioned." 

 

In the core connectivity segment, the company reaffirmed that its focus will remain on connectivity among data centres. "We will continue to invest in a high-quality network which connects these data centres, not only just bring cables to our customers, but bring the platforms they need," a top official said. Further, with growth in artificial intelligence, the company is seeing increased traffic between data centres. "It's the east-west traffic,... (it) is best suited for us because we have the cable strength to monetise that demand. The east-west traffic needs deterministic latency,... a B2B (business-to-business) only network can provide that deterministic latency," another official said.

 

The company remains bullish on its digital infrastructure business amid good wins from the graphics processing units it invested in. "I think most of the GPUs have been sold out now. There is supply constraints in terms of us getting new GPUs in place... Now we want to really push our own cloud. So I want to get this portfolio right so that we are not just looking at top-line growth but delivering the real ROCE (return on capital employed) and profitability from this investment," the management said.

 

The order book of Tata Communications remains robust and the demand situation is getting better, the management said. With the investments it has made in cable, it believes it is equipped to meet the improving demand. Its customer wins also continue to be robust, with continued momentum from global capability centre customers. 

 

While the company's focus will be mainly on improving its EBITDA growth, it will not shy away from making investments in the right areas that will help growth. "Near- to short-term focus is to bring capital discipline, drive profitability, and make sure that we harvest all the acquisitions we have made," an official said. "I think our focus on absolute EBITDA growth will continue. But that doesn't mean that we will not invest capex (capital expenditure) in the right areas." 

 

Earlier in the day, the company reported a consolidated net profit of INR 1.34 billion for the June quarter, down nearly 50% on quarter. The consolidated revenue from operations for the quarter rose marginally on a sequential basis to INR 65.83 billion. Following the earnings announcement, shares of Tata Communications fell nearly 8% to INR 1,680, their lowest level in over two months. The stock later came off the day's low to end at INR 1,761.40 on the National Stock Exchange, down over 3% from Tuesday.  End

 

Edited by Rajeev Pai

 

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