Tata Comm Q2 results: Revenue rises 18% to Rs 5,767 crore, expenses up 20%

The firm posted revenue of Rs 5,767 crore ($686 million) for the three months ended Sept. 30, as compared to Rs 4,873 crore a year earlier

(Reuters) - India's Tata Communications reported an 18% growth in its second-quarter revenue on Thursday, helped by steady demand for its digital services.

The firm posted revenue of 57.67 billion rupees ($686 million) for the three months ended Sept. 30, as compared to 48.73 billion rupees a year earlier.

Tata Communications provides services such as data connections and cybersecurity to enterprises.

The firm's revenue has been a key metric for investors and analysts in recent quarters as it prioritised revenue growth over margins to strengthen its position in the booming Cloud, networking services, and media and entertainment sectors, partly through acquisitions.

Revenue from Tata Communications' mainstay data services business, which contributes about 84% to the total, rose 21%, driven by a 52% jump in its digital portfolio.

However, a 20% rise in its total expenses, driven mainly by growing network and transmission-related spending, pushed its profit before exceptional items down nearly 7% to 2.78 billion rupees during the quarter, its eighth such decline since late 2022.

"We are executing multiple strategic measures, including land monetisation, which will help us create capacity for future opportunities and reposition our assets to capture medium to long term profitable growth," CEO Kabir Ahmed Shakir said.

The company's shares closed 4.8% lower post its results amid a broader sell-off in the market, which saw the benchmark drop nearly 1% on the day.