Tata Communications Ltd Share Price – NSE /  BSE

Telecomm-Service, Small Cap

Tata Communications will hold a meeting of the Board of Directors of the Company on 17 October 2024.

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Tata Communications  is in the process of simplifying the existing layered structure and moving Tata Communications (UK) (TC UK), step down wholly-owned subsidiary, directly under the ownership of the company. With the shares held by Tata Communications (Netherlands) B.V. being cancelled, the company will remain the sole shareholder of TC UK.

In this regard, the Board of Directors of TC UK at their meeting held yesterday i.e., 25 September  2024, considered and approved a proposal for reduction of TC UK's issued share capital from USD 12,216,567.42 divided into 7,541,091 fully paid-up shares of USD 1.62 each to USD 1,686,562.56 divided into 1,041,088 fully paid-up shares of USD 1.62 each by cancelling 6,500,003 shares of USD 1.62 each, registered in the name of or otherwise held by Tata Communications (Netherlands) B.V., an indirect wholly-owned subsidiary of Tata Communications (Share Cancellation).

Approval for the said capital reduction has also been received from UK Secretary of State in accordance with the UK National Security and Investment Act 2021.

Upon consummation of the aforesaid Share Cancellation and completion of subsequent regulatory compliance(s), if any, TC UK would become a direct wholly-owned subsidiary of Tata Communications.

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Net profit of Tata Communications declined 12.80% to Rs 332.84 crore in the quarter ended June 2024 as against Rs 381.69 crore during the previous quarter ended June 2023. Sales rose 18.07% to Rs 5633.37 crore in the quarter ended June 2024 as against Rs 4771.36 crore during the previous quarter ended June 2023.

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However, revenue from operations jumped 18.06% year on year (YoY) to Rs 5,633.37 crore in the quarter ended June 2024.

During Q1 FY25, profit before exceptional items and tax stood at Rs 330.98 crore, down 34.05% from Rs 501.90 crore posted in corresponding quarter previous year. The firm reported exceptional profit of Rs 85.71 crore during the quarter under review.

EBITDA stood at Rs 1,124 crore during the quarter, registering a growth of 9.8% as compared with Rs 1,024 crore posted in same quarter last year. EBITDA margin reduced by 150 bps to 20% in Q1 FY25 as against 21.5% in Q1 FY24.

Data revenue jumped 20% to Rs 4,694 crore during the quarter as compared with Rs 3,912 crore posted in corresponding quarter last year.

AS Lakshminarayanan, MD and CEO, Tata Communications, said: “We are pleased to announce a strong and positive start to FY25, with our quarterly performance indicators showing promising results. We remain bullish about the market opportunities and with our expanded product capabilities and increasing customer relevance, we are confident in our ability to achieve our medium-term growth objectives.”

Kabir Ahmed Shakir, chief financial officer, Tata Communications, said: Our financial prudence, anchored in our 'Fit to Grow' framework, has yielded profitable growth and delivered margin expansion this quarter. As our products continue to gain traction and scale, we anticipate operating leverage, positioning us to achieve our margin aspirations in the medium term.

Meanwhile, The company’s board has approved the proposal for raising of funds through issuance of Non-Convertible Debentures (‘NCDs’) on private placement basis, for an amount up to Rs 2,000 crores. The board also authorized an internal committee, to take all actions in respect of finalization of terms of issuance and allotment of NCDs.

Further, The Board considered and approved the proposal for making an investment in its step down wholly owned subsidiary, Tata Communications (UK) (TC UK). The proposed investment is intended to simplify the existing group structure of the company and its subsidiaries by moving TC UK under direct ownership of the company without any change in the ultimate ownership and beneficial economic interest of the Company in TC UK.

Tata Communications is a global digital ecosystem enabler powering today's fast-growing digital economy in more than 190 countries and territories. Leading with trust, it enables digital transformation of enterprises globally with collaboration and connected solutions, core and next gen connectivity, cloud hosting and security solutions and media services.

The scrip rose 1.14% to end at Rs 1,871.95 on the BSE.

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