TCom reports decent recovery in data segment, deleveragingTATACOMM - 1695 Change: -11.80 (-0.69 %)
News: Topline came in at Rs.4185 crore, down 0.9% YoY & up 0.3% QoQ, led by data revenues (forming ~77% of the revenues) up 3.4% YoY (up 3% QoQ) at Rs.3233 crore, due to pick-up in business and improvement across all data segments. Consolidated EBITDA margin was at 25.9% (up 109 bps YoY, down 79 bps QoQ), up 20 bps on adjusted basis. Data EBITDA margin was at 32.2%, down 80 bps QoQ (up 40 bps on adjusted basis) and flattish YoY. The company reported a PAT of Rs.395 crore, up 28% YoY. There was a sequential decline in net debt by ~Rs.572 crore QoQ on the back of a better working capital mix robust FCF.
Views: Tata Communications remains a key beneficiary of new normal of hybrid work structure, increased conferencing needs thereof and overall digitisation at enterprise levels, which drives our positive stance on the company. The stock is available at ~24x FY23 P/E. We seek management commentary on the growth trajectory ahead.