Margin gains, debt reduction boost Tata Communications' September qtr

Revenue growth momentum, profitability will be key triggers

The Tata Communications stock hit its upper circuit, gaining five per cent, after a strong performance in the September quarter. While revenues were up three per cent over the year-ago quarter, it was the sharp gains in operating profit that stood out.

Operating profit was up 39 per cent year-on-year (YoY) at Rs 1,158 crore, the third consecutive quarter of double-digit growth, and margins grew 680 basis points to 26.3 per cent. This was led by growth in the data business — which accounts for 80 per cent of revenue and 90 per cent of operating profit — and cost efficiencies. 

While