Tata Communications drops after sequential fall in Q3 net profit

Tata Communications lost 2.63% to Rs 294.50 at 12:31 IST on BSE after consolidated net profit declined 54.56% to Rs 36.51 crore on 0.02% growth in net sales to Rs 4953.65 crore in Q3 December 2013 over Q2 September 2013.

The Q3 result was announced after market hours on Wednesday, 12 February 2014.

Meanwhile, the S&P BSE Sensex was down 136.28 points or 0.67% at 20,312.21.

On BSE, so far 71,000 shares were traded in the counter as against average daily volume of 87,163 shares in the past one quarter.

The stock hit a high of Rs 305.50 and a low of Rs 290.55 so far during the day. The stock had hit a 52-week low of Rs 136.90 on 5 August 2013. The stock had hit a 52-week high of Rs 319.50 on 7 January 2014.

The stock had outperformed the market over the past one month till 12 February 2014, advancing 0.18% compared with the Sensex's 1.49% fall. The scrip had also outperformed the market in past one quarter, jumping 10.54% as against Sensex's 0.82% rise.

The mid-cap company has equity capital of Rs 285 crore. Face value per share is Rs 10.

Tata Communications reported a consolidated net profit of Rs 36.51 crore in Q3 December 2013 compared to net loss of Rs 201.01 crore in Q3 December 2012. Net sales rose 11.7% to Rs 4953.65 crore in Q3 December 2013 over Q3 December 2012.

Tata Communications said that growth in Q3 December 2013 was mainly driven by the global data solutions (GDS) business which sustained growth momentum across regions. Ethernet, VPN solutions and managed services continued to be the forerunners and helped global data solutions grow significantly, the company said. The Global wholesale voice business delivered stable performance in-line with its long-term vision of sustainable performance, Tata Communications said in a statement.

The start-up business, comprising primarily of Neotel, contributed to an 8% rise in revenues at Rs 519.60 crore in Q3 December 2013 compared to Rs 481 crore in Q3 December 2012. The start-up business EBITDA margins stood at 31.1% during the quarter, sharply up from 10.3% in Q3 December 2012, Tata Communications said in a statement.

Commenting on the company's Q3 performance, Vinod Kumar, MD and CEO, Tata Communications said, "Tata Communications continues to deliver sustained and profitable growth on the back of investments into innovative services and brand, as well as prudent cost management. Our business mix is favourably trending towards a higher proportion of managed services and consumption by Enterprise customers".

Sanjay Baweja, CFO, Tata Communications said, "Operationally, we are hitting the right milestones across our businesses. As envisaged, while voice margins have normalised during the quarter the overall margin profile has remained robust and is being complemented by the data business delivering sustainable margins at 20%. Enhancing operational efficiency at every level of the business and driving free cash generation remain our two key focus areas".

Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.

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