Tata Communications hits 9-year high post Q3 results

The stock rallied 6% to Rs 712, its highest level since January 2008 on the BSE.

Tata Communications has rallied 6% to Rs 712, also its 9-year high on the BSE in intra-day trade, after the company reported an over 12-fold jump in its consolidated net profit of Rs 1,413 crore for the December end quarter (Q3FY17),  mainly on account of one-time gain due to sale of its data centres.  Tata Group Company had profit of Rs 111 crore in the same quarter last fiscal.

The "exceptional" one-time gain came from the stake sale of the India Data Centre Rs 2,138 crore that was partly offset by the impairment Rs 250 crore on account of the South African subsidiary, Neotel, the company said in a statement.

Gross revenue of the company decreased by 4.5% to Rs 4,872 crore while EBITDA (earnings before interest, tax, depreciation and amortization) stood at Rs 722 crore registering a year on year drop of 3.7%.

Quarterly revenue and EBITDA growth were impacted by the exclusion of the India data centre revenue with effect from October 19, 2016 and also a couple of regulatory changes that led to modifications in access facilitation agreements and the demonetization drive which affected the payment solutions business, Tata Communication said in a statement.

The company’s core business (consolidated excluding Neotel) EBITDA margin stood at 16.8% in Q3 against 16.6% in Q2.

"The operational performance of the business continues to be robust as the growth trajectory in the data business continues to be positive. The process of de-leveraging has begun and the business is generating healthy free cash flow,” Pratibha K. Advani, chief financial officer, Tata Communications said.

At 11:56 am; the stock was up 5% at Rs 704, its highest level since January 2008 on the BSE. A combined 2.25 million shares changed hands on the counter on the BSE and NSE so far.