Tata Communications share price slumped over 5 per cent on the NSE today. Tata Communications reported a dip of 64 per cent in its consolidated net profit at Rs 40 cr for the September quarter (Q2), mainly because of impairment charges on its investment in South Africa based firm Neotel. The company had reported a net profit of Rs 112.27 cr in the same period a year ago.
Tata Communications incorporated Rs 125 cr as exceptional loss item. It said in a note that Rs 125 cr was an impairment on investment in ‘Neotel’. The company also incorporated impact of its data centre business. Tata Communication sold 100 per cent stake in Singapore’s data centre business and 74 per cent stake in India’s data centre business to ST Telemedia for SGD 232.4 mn and Rs 3,130 cr, respectively.
The total income from operations of the company declined marginally to Rs 4,509.09 cr during the reported quarter from Rs 4,541.45 cr a year ago. The data business of Tata Communications grew by 12 per cent to Rs 2,571.7 cr from Rs 2,293.33 cr. The payment solution business of the company grew by 10 per cent to Rs 152.55 cr from Rs 138.59 cr during the period under review. Meanwhile, Tata Communications share price was trading 5.36 per cent lower on the NSE.
Tata Communications MD and CEO Vinod Kumar said that the company continues to contribute to the digital transformation journey of global businesses. He added that the Q2 or second quarter enterprise revenue had grown by over 24 per cent on a year-on-year basis and as they continue to increase the momentum of their data product portfolio, they were well positioned to grow and perform going forward.
However, the company witnessed a decline of 15 per cent in revenue of its voice business to Rs 1,785.8 cr from Rs 2,111.29 cr a year ago.
Tata Communications CFO Pratibha K Advani said that with continued focus on driving operational efficiencies, they had generated healthy free cash flows of Rs 794 cr for core business in first half of the year. They were focused on strengthening their balance sheet and setting the stage for healthier return ratios, he added.
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