Tata Communications profit rises four-fold in December quarter to Rs 309 crore

Tata Communication on Tuesday reported a 432.7 per cent year-on-rise rise in the consolidated profit at Rs 309 crore for the quarter ended December 31, 2020. The company reported a net profit of Rs 58 crore in the corresponding quarter last fiscal.

The surge in profit was attributed to cost efficiencies and improved business processes as well as higher deferred tax credits during the quarter under review. The profit in sequential terms, however, was down 19.6 per cent from Rs 384.81 crore in the September quarter of the current fiscal.

The telecom operator's revenue remained almost unchanged at Rs 4223 crore in the reported quarter compared to Rs 4230 crore posted last year as growth in data business offset the decline in that of voice. Its data business recorded "stable growth despite a seasonally slow quarter.

Tata Communications consolidated EBITDA for the December quarter GREW 37.5 per cent to Rs 1,046 crore on the back of robust growth and margin expansion in the data business and cost optimisation initiatives. The company's EBITDA stood at Rs 761 crore last year. The margin grew to 24.8 per cent in Q3FY21 against 17.9 per cent reported in Q3FY20.

The company said that its Net Debt has come down on the back of strong free cash flow generation; Net Debt to EBITDA at 1.9x as compared to 2.9x for the same quarter last year. The company in a statement said, its CAPEX for this quarter was Rs 339 crore as compared to Rs 490 crore in Q3FY20.

Announcing the results, A.S Lakshminarayanan, MD and CEO, Tata Communications, said, "Our disciplined execution has helped us deliver good results in a seasonally weak quarter. Our Secure Connected Digital Experience (SCDx) offering continues to be relevant as we reimagine the New World for our customers. At the same time, our investments in products and services are positioning us well in our customers' digital transformation journeys, an example being our investment in Oasis. I am happy to share that during the quarter, our efforts in Sustainability for Climate Change placed Tata Communications in the leadership band of the Carbon Disclosure Project (CDP) Report encouraging us to continue to make a difference to our Planet."

Besides, the government will sell its entire 26.12% stake in Tata Communications Ltd (TCL), erstwhile VSNL, through an offer for sale and strategic sale route in the current fiscal. The transaction is to be completed by March 20, 2021. At the current market price, 26.12 per cent stake in the firm would fetch the exchequer around Rs 8,400 crore.