Tata Communications April-June Profit Slumps 82% Sequentially; Revenue Dips

Tata Communications Ltd. posted weak results for the June quarter, with consolidated net profit falling 82% on quarter to ₹1.90 billion—its steepest drop in at least 19 quarters—due to a high base from a one-time gain in the previous quarter. The bottom line was also down 43% on year.

Revenue slipped 0.5% on quarter to ₹59.60 billion, its first sequential fall in four quarters, though it rose nearly 7% on year. The company attributed the profit decline to a sharp drop in other income, which fell over 75% on quarter to ₹171 million, and a 7%-plus rise in employee expenses to ₹12.18 billion.

Network and transmission expenses, accounting for nearly half of total costs, rose 0.6% sequentially and 16% on year. Other expenses fell over 14% on quarter to ₹8.76 billion, supporting the bottom line. EBITDA for the quarter stood at ₹11.37 billion, flat on year, while the EBITDA margin dropped 125 basis points to 19.1%. Net profit margin fell 248 basis points on year to 3.9%.

Revenue from data services rose 0.6% on quarter to ₹51.52 billion, contributing over 86% of total sales. Voice solutions grew 5%, while transformation services fell 29% sequentially.

The board approved raising up to ₹10 billion via non-convertible debentures on a private placement basis. It also cleared the acquisition of its step-down unit, Solutions Infini Technologies (India) Pvt. Ltd., from Kaleyra S.P.A. for ₹1.24 billion.