Global orders may be hit if trade war volatility stays: Tata Comm CFO

Highest ever order book in first half of FY25 has translated to revenue in Q4

Global clients may delay decisions on major orders if the volatility of the ongoing trade war continues for long, which may slow orders, Tata Communications chief financial officer Kabir Ahmed Shakir said. This might impact revenues for the telco, as well as companies across the board, he added.

 

"Even before the sharper tariffs were announced, US economists were predicting a $4,000 per annum increase in average household expense as a result of the 10 per cent base rate tariff hike. We will know the impact once the dust settles down. Every industry and company will evaluate those things and take a call. But in the short term, they will re-prioritise funds available with them. Once the impact becomes clear, they will take action," Shakir told Business Standard.

 

 

Tata Communications is a global communications and IT services provider that offers a wide range of services, including global connectivity, cloud solutions, managed services, and Internet of Things (IoT) solutions. It also owns 243,000 km of subsea cables, making it the world’s largest wholly owned subsea fibre backbone and a Tier-I internet protocol network with connectivity to 190-plus countries.

 

In the first two quarters (April-September) of FY25, the company achieved its highest ever order book, which has translated into revenue in Q4, the CFO said. Revenue from data grew 3.9 per cent sequentially, and 9.6 per cent year-on-year (Y-o-Y). The company has focussed on the digital portfolio, which has grown by around 30 per cent annually in FY25, Shakir said.

 

Tata Communications last week reported 114.8 per cent year-on-year (Y-o-Y) growth in its consolidated net profit at Rs 761 crore in the fourth quarter (January-March) of FY25, compared with Rs 354 crore in the year-ago period. This was mostly due to an exceptional gain from the monetisation of a land parcel in Chennai. The company continues to review its portfolio of businesses.

 

In Q4, the company's revenue from operations in the reporting period jumped 6.1 per cent year-on-year to Rs 5,990 crore as against Rs 5,645 crore in the same period last year. Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter increased 4.3 per cent Y-o-Y to Rs 1,122 crore.

 

The company will also continue to look into acquiring strategic assets, Shakir said. The company had acquired Nasdaq-listed global communications platform-as-a-service (CPaaS) player Kaleyra and American end-to-end live video production company Switch Enterprises the year before. Shakir said the company continues to review its extensive list of subsidiaries, with a clear focus on optimising their performance and unlocking value.

 

He stressed this focus on acquisitions is here to stay. "Companies need to be mindful of the fact that innovation is not a proprietary asset. It can be done by anybody. So, they need to look for growth organically, and constantly scan the environment for inorganic opportunities, provided they come at a good value, make strategic sense, and drive synergies," Shakir said.