Tata Communications is a player in the digital technology ecosystem with a portfolio of products around data and voice. A smaller segment includes Tata Communications Payment Solutions and Tata Communications Transformation Services. The offerings from the company, among others, are in the areas of WAN ethernet, global VPN and international private lines.┬а
Here are a few takeaways from the recent financial results:┬а
Net profit: On a consolidated basis, it dropped by 2.1 per cent to Rs 532 crore in the second quarter (Q2) of the current fiscal compared to Rs 544 crore in Q1. Gross revenue moved up to Rs 4,431 crore from Rs 4,311 crore during the same period as did EBITDA. ┬а
Business segments: The companyтАЩs two segments тАУ voice and data тАУ saw revenues move up, with the latter bringing the lionтАЩs share of the revenue at 79 per cent. The companyтАЩs management spoke of healthy growth in international markets and how continued efforts of shifting products to platforms has been yielding positive results. ┬а
Importantly, the analyst meet held in June this year saw Tata CommunicationsтАЩ management reiterating its strategy on platform transformation with a focus on on product innovation, new launches, higher customer wallet share and financial fitness to accelerate topline growth. A report put out by Emkay then spoke of how, in the last two years, the company has delivered on its financial fitness goals, though revenue recovery has seen a delay. тАЬThe management sounded positive about the improving funnel rate, potential deal conversions, new product launches and increased investments. However, it continued to be non-committal regarding revenue growth guidance.тАЭ ┬а
Outlook: According to Deven Choksey, MD, K R Choksey Securities, the outlook for the company looks positive but тАЬthere is a need to listen to the management.тАЭ To him, the business model in shape and there is also a steady rate of growth. тАЬWe need to be cautiously optimistic since the stock like a good part of the market is fully priced.тАЭ On the numbers for Q2, he expresses no surprise and points out it is on the back of тАЬa revised pricing model and better yield pricing.тАЭ┬а
Also read:┬аTata ElxsiтАЩs growth story continues in Q2! Key takeaways┬аfrom quarterly results
Also read:┬аTata Elxsi shares fall for second straight session post Q2 earnings┬а
