InvestorQ : Why have the results of Tata Communications been so bad in the December quarter and what does that mean for the stock price?
Mitali Bhutta made post

Why have the results of Tata Communications been so bad in the December quarter and what does that mean for the stock price?

Answer
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Dawn Cherian answered.
9 months ago


You are right that Tata Communications reported a 66% dip in net profit to Rs.59 crore during the December quarter. There was also a 1% dip in revenue growth at Rs.4,243 crore. Tata Communications reported EBITDA at Rs.761 crores with margins EBITDA margins at 18%. The fall in EBITDA was primarily led by the fall in the voice business and a one-time cost of Rs.62 crore. Of course, the lucrative data business continued to drive growth and profitability both in India and globally.

The company also received demands for Rs.6,633 crore from DOT towards License Fee on its Adjusted Gross Revenue (AGR) for the financial years 2006-07 to 2017-18. However, this includes an amount of Rs.5,434 crore disallowed by the telecom department. It may be recollected that following the October 24 order, the DoT had sought Rs.147,000 crore from telecom operators Bharti Airtel, Vodafone Idea and 13 other telecom companies as AGR. The AGR does not appear to be a major issue but a lot will depend on how it manages to capitalize on the shift to data.