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Tata Communications has announced its financial results for the quarter ended 30 June 2021. Consolidated revenue came in at INR 4,103 Crore (USD 556 Mn), growing 0.7% quarter-on-quarter (QoQ), and decreasing 6.8% year-on-year (YoY). This YoY contraction is primarily due to reduction in Voice business and moderation of Collaboration traffic in the Data segment.

Consolidated EBITDA stood at INR 986 Crore (USD 134 Mn); reduction of 5.3% YoY. This quarter, EBITDA has been impacted by a provision of INR 33 Crore 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. CAPEX for this quarter grew to INR 381 Crore as compared to INR 372 Crore in Q1 FY21.

Data business revenue came in at INR 3,104 Crore witnessing a growth of 0.6% QoQ and a 2.2% 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. EBITDA for the segment stood at INR 932 Crore; up 0.4% QoQ and decline of 2.4% YoY. EBITDA was affected by provision of license fee made during the quarter and despite this impact EBITDA margin is maintained at 30%.

In Core Connectivity, there is a healthy growth in revenue by 1.7% YoY, and EBITDA increased by 0.3% YoY with margins at 42.6%. Digital Platforms and Services were affected by moderation of Collaboration traffic which was at its peak in Q1 FY21. Revenue strengthened by 2.9% QoQ but reduced by 12.8% 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 IZO™ 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.”

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