Tata Communications has announced its financial results for the quarter ended (QE) June 30, 2021.

Company’s consolidated revenue stood at Rs 41.03 billion, a quarter-on- quarter (QoQ) growth of 0.7 per cent and 6.8 per cent decrease year-on-year (YoY). This YoY contraction is primarily due to reduction in Voice business and moderation of Collaboration traffic in the data segment. Meanwhile, consolidated profit after tax (PAT) is at Rs 2.96 billion for Q1 FY22 as compared to a profit of Rs 2.58 billion in Q1 FY21, registering a growth of 14.9 per cent YoY

Further, consolidated EBITDA stood at Rs 9.86 billion, a reduction of 5.3 per cent YoY. This quarter, EBITDA has been impacted by a provision of Rs 330 million on account of license fee on revenue from pure internet services which was allowed as deduction in the definition of adjusted gross revenue (AGR) earlier. Despite this impact EBITDA margin has expanded by 40 BPs YoY. Further, CAPEX for this quarter grew to Rs 3.81 billion as compared to Rs 3.72 billion in Q1 FY21.

Data services portfolio

Data business revenue came in at Rs 31.04 billion witnessing a growth of + 0.6 per cent QoQ and a -2.2 per cent YoY reduction. Data business continues to be affected by COVID related slowdown. Enterprise decisions have been slow due to macroeconomic headwinds leading to longer lead time for deal wins. Service delivery was affected by lockdowns during the 2nd Wave of COVID-19 pandemic. Further, EBITDA for the segment stood at Rs 9.32 billion; up +0.4 per cent QoQ and decline of – 2.4 per cent YoY. EBITDA was affected by provision of license fee made during the quarter and despite this impact EBITDA margin is maintained at 30 per cent.

In core connectivity, there is a healthy growth in revenue by +1.7 per cent YoY, and EBITDA increased by +0.3 per cent YoY with margins at 42.6 per cent. Digital Platforms and Services were affected by moderation of Collaboration traffic which was at its peak in Q1 FY21. Revenue strengthened by 2.9 per cent QoQ but reduced by -12.8 per cent YoY. There are early signs of recovery and an uptake of usage based services in geographies where economies have opened

“In a challenging quarter impacted by the second wave of COVID-19, we have delivered a robust performance,” said A S Lakshminarayanan, Managing Director and CEO, Tata Communications. “The global markets are slowly opening up and we are witnessing greenshoots of demand recovery.” He added, “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.”

Commenting on the results, Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications, said, “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.”