Tata Communications Q3 profit falls by 3.5% to Rs 41.7 crore

NEW DELHI: Indian telecom giant Tata Communications has posted net profit at Rs 41.7 crore for the April-June quarter with a 3.5 %  decline compared to the profit of Rs.Rs 43.3 crore in the year-ago period.

The company's consolidated EBITDA grew by 18% YoY to Rs 863 crores for the quarter with a 307 bps improvement in YoY EBITDA margins on the back of strong performance by Data services and aided by Voice.

"Core business (consolidated numbers excluding Neotel) registered a growth of 2% in revenues YoY while EBITDA increased by 32% to Rs 786 crore. This growth continues to be driven by the Global Data business which registered a growth of 14% in revenues and 42% in EBITDA YoY," the statement said.

In line with our strategy, revenue and EBITDA have shown a healthy trend over the last few quarters. We are seeing a clear shift in our business mix with revenue from Data services contributing 56% to gross revenue and 78% to EBITDA.

Productivity initiatives coupled with stability in volumes are leading to an improvement in Voice EBITDA, with a quarter-on-quarter improvement of 70 bps in margins.

"We continue to generate healthy free cash flow. The free cash flows (EBITDA minus Capex) from the Core business for Q1 FY17 came at INR 346 crores (USD 52 Mn) and represent a growth of 31% on a YoY basis," it said.

“We see ourselves as enablers in a world where businesses are accelerating their digital transformation and creating a platform economy. It is our intent to provide tailored solutions such as connectivity, cloud and mobility to enterprises in a secure and reliable manner. The layer of value-added services that sits above our world-leading infrastructure is driving the transformation of our business," said Commenting on these Q1 FY17 results, Vinod Kumar, MD and CEO, Tata Communications.

“We have also seen a healthy accretion in both Global Enterprise and NextGen customers. This is important as these are the cornerstones for our future growth. As we evolve with macro-trends like IoT, Big Data and Artificial Intelligence (AI), the business is geared to deliver a steady enhancement in performance going forward. And as seen in this quarter, we are seeing a consistent directional improvement in Global Data services," he added.

“We are making positive strides in improving the quality of our earnings and showing consistent growth. Both the divestiture of Neotel and the strategic joint venture partnership announcement of our India and Singapore Data Centres give us headroom to operate more effectively in a highly-competitive environment," said Pratibha K Advani, CFO, Tata Communications.

“We are committed to driving efficiency of capital utilisation and this is reflected in the improvement in our Return on Capital Employed for our Core business from 8.6 % in FY16 to 10.1 % at the end of Q1 FY17," added Advani.