Tata Communications reports highest revenues in 11 years

Tata Communications reports highest revenues in 11 years

29 April 2021 | Natalie Bannerman

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Tata Communications has published its financial results for the FY21 and for Q4 of 2021.

According to results, consolidated revenue across the business for FY21 totalled INR 17,100 Crore ($2.3 million), up by 0.2% year on year. Growth would have been higher but the company says that its business environment has been affected by the pandemic.

Broken down, data revenue totalled INR 14,309 Crore ($1,9 million) up 4.5% year on year and driven by a strong performance in traditional services.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) came in at INR 4,261 crore ($574 million) up 29.5% year on year, while profit for the period reached at INR 1,251 Crore ($168 million) in comparison to a loss of INR 86 Crore ($11.6 million) - the highest profit in the last 11 years, translating into an INR 44 ($0.59) per share.

The company’s net debt to EBITDA lower to 1.8x, roughly INR 7,786 crore ($1 million) compared to 2.8x in FY20. Return on Capital for FY21 was also up by 24.6% as compared to 11.5% in FY20.

“FY21 has been a great year; making excellent progress on our well-defined strategy,” said A.S Lakshminarayanan (pictured), managing director and CEO of Tata Communications.

“Execution on financial fitness is yielding good results and the shifts from products to platforms, deeper customer engagements are a work in progress and we anticipate continued progress on these strategic levers to achieve our goals. Our teams have gone the extra mile in delivering benchmark level net promoter score in a difficult year and are committed on execution to deliver on our strategy.”

As for its Q4 FY21 results for the period ending 31 March 2021, consolidated revenue topped INR 4,073 Crore ($559 million), a decline of 7.4% year on year. This is largely due to declines in its voice data business.

Specifically, data revenue totalled INR 3,515 Crore ($482 million), down 2.2% year on year. This was driven by longer deal conversions and execution cycles due to COVID-19 and moderation of UCC traffic.

Profit for the quarter despite slower revenue growth was still up. Profit reached INR 299 Crore ($40.3 million) compared to INR 275 Crore ($37.1 million) in same quarter of 2020. EBITDA for the quarter totalled INR 1,015 Crore ($139 million), up 16.8% year on year.

“Our focus on right operating structure and cost efficiencies have started to show results during the year,” added Kabir Ahmed Shakir, chief financial officer at Tata Communications.

“There has been significant improvement in profitability making our business fit to compete effectively. Profit and cash flow generation has improved dramatically. We now have a stronger balance sheet providing us the flexibility to invest for future growth of business.”