Tulip Telecom Q3 net down 5.3% at Rs 77 cr

Tulip Telecom today reported 5.3% decline in consolidated net profit at Rs 77.25 crore for third quarter ended in December.

It had posted net profit of Rs 81.61 crore during the October-December quarter in the 2010-11 fiscal.

"The decline is mainly due to increase in interest rate and depreciation of assets. However, for the nine month period we have registered 8.5% growth in our net profit. EBIDTA margin improved from 28.5% to 29% in the quarter" Tulip's Executive Director Deepinder Bedi said.

He added that improvement in EBIDTA or operating profit, which indicates cash flow, has been due to better utilisation of assets.

Tulip's revenue during Q3 grew by 14% at Rs 686.6 crore, compared to Rs 602.57 crore the company posted for the same period in Financial Year 2010-11.

The company expects to complete 1,200 km of National Long Distance (NLD) fibre between Mumbai and Chennai on schedule, and return on investment (RoI) after two years.

"It will be completed by end of this financial year and we are looking for RoI from this after two years " Bedi said.

He said Tulip has total debt of Rs 2,400 crore which includes Foreign Currency Convertible Bonds worth Rs 550 crore, due for maturity in August 2012.

Tulip is looking to dilute equity in its data centre firm Tulip Data City to raise Rs 250 crore to lower debt. It was launched this week in Bengaluru with an investment of Rs 900 crore and expects to have annualised revenue of Rs 1,000 crore from the third year onward.

Bedi said that company is in process to leverage this data centre for its cloud computing offerings.

"We are building solution to offer cloud services from our data centre. The company is also building managed services portfolio to add to our existing offerings," Bedi said.

During the quarter, Tulip won order from Rajasthan State Crime and Criminal Tracking Network and Systems (CCTNS) for a turnkey network implementation across 1,172 locations which includes all Police Stations and higher offices across State of Rajasthan.

The company also secured a project in Bihar.

The other new clients of company added during the quarter include NTT Communications, Sahara Para Banking, Axis Bank, Tata Mutual Fund and Tata Interactive Systems.

Shares of the company closed at Rs 110.75 on the BSE, down 2.69%, compared to the previous close.