- 19 Oct 2022
- ICICIdirect Research
Tata Communications reports steady quarter on operating frontTATACOMM - 1246 Change: 16.35 (1.33 %)
Tata Communications’ Q2FY23 performance was largely in line on the operating front with margins remaining resilient. Topline came in at Rs 4431 crore, up 6.2% YoY & up 2.8% QoQ, driven by data revenues (forming ~79% of revenues), up ~11.2% YoY (up 4.6% QoQ) at Rs 3493 crore. Consolidated EBITDA came in at Rs 1130 crore, up 1.5% YoY, 4.9% QoQ. The consequent margin was at 25.5% (down 117 bps YoY, up 51 bps QoQ) led by voice margins, which were at 19.3%, up 890 bps. We believe this would have some one-off element. Data EBITDA margin was at 28.8%, down 20 bps QoQ. The company reported PAT of Rs 532 crore, up 11% YoY, aided by one-off item (profit on sale of properties - Rs 46.7 crore and provision reversal - Rs 29.7 crore) and lower taxes.
While revenue growth is on a recovery trajectory along with continued cash flow generation, margin also remains largely steady. Tata Communication remains a key beneficiary of new normal of hybrid work structure, increased conferencing needs thereof and overall digitisation at enterprise level. We seek management commentary on growth and margins trajectory ahead.