Tata Communications notes "robust" quarter amid Covid second wave
Tata Communications saw a 14.9% year on year increase in profit after tax in Q1 FY2022, to US$40 million (INR 296 Crore), and growth of 0.7% in consolidate revenue quarter on quarter to $556 million.
However, year on year, consolidated revenue declined 6.8% to INR 4,103 Crore, primary due to reductions in voice and "moderation of collaboration traffic in the data segment", which was at peak in Q1 of last year.
In voice, Tata counts more than 1,600 telecom partnerships and its network handles one out of every 10 international calls, while connecting more than 70% of the world’s mobile carriers. The voice business declined by 26.3% year on year.
Consolidated revenue in data dropped by 42.2% while in digital platforms and services revenue strengthened by 2.9% quarter on quarter, but reduced by 12.8% year on year. Tata said there are "early signs of recovery and an uptake of usage-based services in geographies where economies have opened".
A S Lakshminarayanan (pictured), managing director and CEO, commented: “In a challenging quarter impacted by the second wave of Covid-19, we have delivered a robust performance. The global markets are slowly opening up and we are witnessing green shoots of demand recovery.”
He continued: “Our focus is to continue investing in developing innovative digital ecosystem solutions driven by customers’ needs. Early demand for our recent launches for live sports on our Media Edge Cloud and IZOTM Financial Cloud is testament that we are moving in the right direction.”
In core connectivity, there was "healthy growth in revenue" of 1.7% YoY, and EBITDA increased by 0.3% YoY with margins at 42.6%.
Data business revenue, which continues to be affected by Covid-related slowdowns, came in at INR 3,104 Crore witnessing a growth of 0.6% QoQ and a 2.2% year on year reduction. Tata noted that enterprise decisions have been slow due to macroeconomic headwinds leading to longer lead time for deal wins". Service delivery was affected by lockdowns during India's second wave of the pandemic.
Kabir Ahmed Shakir, CFO, Tata Communications, added: Our focus on growth and profitability continues to deliver results. A healthy profit and free cash flow is empowering us to innovate and accelerate growth while streamlining processes and bringing in further efficiencies. We are well-poised to enable enterprises make the shift with digitalisation playing a pivotal role enabling businesses derive positive growth.”