October 25, 2017

Tata Communications reports 40.5 percent YoY increase in Growth Services

Mumbai: Tata Communications, today, announced its financial results for the quarter ended September 30, 2017.

Highlights | Q2 FY2018
Data business continues to build on the momentum and posts a revenue growth of 2.2 percent YoY. Growth Services witnessed strong growth traction, with 40.5 percent increase in revenues YoY and 16.7 percent QoQ. Traditional services posted a 1.7 percent improvement in revenues YoY.

  • EBITDA increased 1.1 percent QoQ with a margin expansion of 40 BPs over the last quarter, aided by increase in Voice margins and a one-time gain in Payment Solutions (TCPSL).
  • Consolidated business revenues declined 2.1 percent QoQ and 6.5 percent YoY, primarily due to a continuing decline in the Voice business revenues, coupled with a decline in Transformation services (TCTSL) QoQ on account of lower revenues from Tata Teleservices.
  • EBITDA margins declined 110 BPs YoY due to Payment Solutions (TCPSL) (30 BPs), adverse Forex impact (30 BPs) and higher investments in Innovation, Transformation and access charges impact (60 BPs).
  • PAT recorded negative at Rs250 crore on account of additional provision of Rs186 crore as per the contractual obligation to Tata Sons on the Tata Teleservices investment and due to other one-time exceptional provisions of Rs27 crore.
Consolidated Nos.* INR Crore QoQ YoY USD Mn QoQ YoY
Gross Revenue 4,218 (2.1%) (6.5%) 656 (1.9%) (2.6%)
EBITDA 565 1.1% (13.7%) 88 1.3% (10.1%)
EBITDA margin 13.4% 40 Bps (110 Bps) 13.4% 40 Bps (110 Bps)
PAT (250)     (39)    

* All the prior period numbers have been re-cast without data centre to enable like-to-like comparison.

Commenting on the results, Vinod Kumar, MD and CEO, Tata Communications, said, “Our portfolio continues to transform in line with our strategic intent to grow our digital infrastructure services. In addition to the accelerating performance of Growth Services, we are buoyed by the market response to our new cyber-security and IoT services. We continue to invest in our internal digitalisation programme to enhance future productivity and customer experience.”

Commenting on the results, Pratibha K Advani, CFO, Tata Communications, said, “The performance delivered during H1 largely captures impact of transformative initiatives that we have taken in the past few quarters. Our growth services portfolio is driving strong and sustained expansion in the revenue profile of the business. The focus is clearly on driving solutions that can evolve, grow and serve enterprise customers effectively.”

[1] Traditional services include Virtual Private Network, International Private Line, Internet Leased Line, Ethernet, Internet Protocol –Transit, Inmarsat, Content Delivery Network, National Private Line, Mobility, Data Centre, Unified Collaboration and Conferencing.

[2] Growth services include IZO™, Managed Hosting, Managed Security Services, Broadcast, Video Connect, SIP Trunking, Global Hosted Contact Center, Video Streaming, Mobile New Services, Healthcare, Media Management and Mobile Innovation.

Business highlights | Q2 FY2018 

An Investor fact sheet providing a detailed analysis of the results for the quarter and half-year ended September 30, 2017 has been uploaded on the Tata Communications website.