Tata Communications continues to drive growth and profitability
By MYBRANDBOOK
Tata Communications today announces its financial results for the quarter ended September 30th, 2019. The Data services revenue grew by +10.7% YoY | Consolidated EBITDA increased by +32.3% YoY with margin expansion of 400 Bps
Commenting on the results, A.S Lakshminarayanan, MD and CEO - Designate, Tata Communications, said, “As the market continues to evolve at an unprecedented rate, the need to accelerate digital transformation across all layers of the enterprise is the reality businesses face to remain competitive today. Our focus on providing digital infrastructure solutions that align with this customer need is showing results. This is evident in the growth and profitability of our Data business which now drives 79% of business revenues. By being a part of our customers’ digital journeys, we remain committed to steering the business towards sustainable profit and ultimately, demonstrable stakeholder value.”
Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said, “We have witnessed a robust trend over last few quarters with strong financial performance delivered across all key parameters. Our Data business has continued to witness strong performance in revenue as well as profitability, despite industry headwinds. We have a strong order book and we expect this trend to continue as we keep executing on large deals.
Communication infrastructure needs of enterprises have evolved and digital transformation is the focus area. Robust growth in our Enterprise business of 10.8% shows that we have established ourselves as a preferred digital transformation partner.”
Highlights|Q2 FY2020
Data services portfolio
* Strong growth in Data business; revenue grew by +10.7% YoY on the back of robust performance in Traditional services and Transformation services portfolio, despite industry headwinds
* Data EBITDA was at INR 752.4 crore (USD 106.8 Mn); up +40.0% YoY led by strong growth in Traditional services and profitable gain in Growth services
* Traditional services[2] saw a robust growth in revenue and profitability; revenue grew by +7.2% YoY and EBITDA grew by 40.0% YoY with margins at 37.8%. Within this portfolio, the India business has regained momentum after being affected by operator consolidation last year
* Growth services continue to scale and witness profitable growth; revenue grew by +13.7% YoY. We are witnessing operating leverage in this portfolio; EBITDA grew by +33.2% QoQ with a margin expansion of 90 Bps
Consolidated financial highlights
* Consolidated revenue was at INR 4,273 crore (USD 607 Mn); growth of +5.0% YoY on the back of continued improvement in Data business
* Consolidated EBITDA at INR 833.7 crore (USD 118.4 Mn); increase of +32.3% YoY on the back of strong growth in Traditional services and margin expansion in Growth services
* Consolidated PAT at INR 53.9 crore (USD 7.6 Mn) as compared to a profit of INR 1.6 crore (USD 0.4 Mn) in Q2 FY19
* CAPEX for this quarter was USD 65 Mn as compared to USD 45 Mn in Q1 FY20
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