Tata Communications has announced its financial results for the second quarter ended September 30, 2021.
Consolidated financial highlights
The company reported $563 million in revenue and posted a QoQ increase of 1.7 per cent and a YoY decrease of 5.2 per cent. Sequential growth is a result of a gradual recovery in both the data and voice segments. EBITDA for quarter one increased by 12.9 per cent QoQ, but decreased 3.9 per cent YoY at $150 million. The margin expanded by 260 BPs QoQ and by 40 BPs YoY. The consolidated profit after tax for Q2 FY21 was $57 million, a growth of 10.6 per cent YoY and 43.7 per cent QoQ. This quarter’s CAPEX was INR 392 crore, as compared to INR 318 crore in Q2 FY21.
Data services portfolio
There was a growth of 1.1 per cent QoQ and a decrease of 2.2 per cent YoY in data revenues. After three-quarters of decline due to COVID, Tata Communications have started to witness a gradual recovery in business, with all segments registering sequential growth. With EBITDA at INR 1,049 crore, the segment registered a growth of 12.6 per cent QoQ and a decrease of 3.4 per cent YoY. The margin was 33.4 per cent due to an increase in profitability in core connectivity and digital platforms & services. Revenue grew by 0.4 per cent YoY; EBITDA rose by 0.9 per cent YoY and 8.0 per cent QoQ, with margins at 45.9 per cent. On a quarterly basis, digital platforms and services revenue increased by 2.3 per cent QoQ.
Commenting on the second-quarter performance, A.S Lakshminarayanan, managing director and chief executive officer, Tata Communications, said, “Delivering a sequential growth on a quarter-on-quarter basis after three quarters of decline is a positive indicator which we will continue to build on. The second quarter of FY22 was marked by recovery with favourable underlying trends as economic activities normalise. As the global industries recover, we continue to maintain sharp focus on the needs of our customers, in line with the rapidly changing trends and evolving digital needs.”
Commenting on the results, Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications, said, “Our performance in the second quarter demonstrates a continued improvement in revenue supported by improvement in profitability and build-up of free cash flow. We continue to strengthen our balance sheet and invest for future growth as we evolve as a trusted partner for our customers, enabling their digital transformation journey.”