Tata Communications announces Q4, FY2020 earnings

Tata Communications today announces its financial results for the quarter and full-year ended March 31st, 2020.

Highlights

Data services portfolio

- Strong growth in Data business; Q4 revenue grew by +7.5% YoY on the back of robust performance in Traditional and Growth services aided by an uptick in usage due to the COVID-19 pandemic and ensuing lockdowns. Full year revenue grew by +8.2% YoY

- Q4 Data EBITDA was at INR 823 crore (USD 114 Mn); up +39.8% YoY led by a strong profitable gain in Growth services1, robust performance in Traditional services. Full Year EBITDA grew by +25.6% with a margin expansion of 310 BPs


- Traditional services2 saw strong growth in revenue and profitability; revenue grew by +5.3% YoY and EBITDA grew by +24.5% YoY with margins at 37.0%. Within this portfolio, we witnessed a surge in internet traffic (+23% QoQ) with enterprises implementing work from home

- Growth services continue to scale and witness profitable growth; revenue grew by +9.8% YoY. Within this portfolio, we witnessed a surge in Conferencing traffic and revenue (+20% QoQ). We have achieved double-digit margin (11.6%) in this portfolio during the quarter.

Consolidated financial highlights

- Q4 Consolidated revenue was at INR 4,398 crore (USD 608 Mn); growth of +3.6% YoY on the back of continued strong performance in the Data business

- Q4 Consolidated EBITDA stood at INR 869 crore (USD 120 Mn); increase of +26.8% YoY on the back of strong profitable growth in Traditional and Growth services

- Consolidated loss was at INR 275 crore (USD 39 Mn) as compared to a loss of INR 199 crore in Q4 FY19. This quarter's loss was due to a provision of INR 342 crore towards additional license fees liability. Full year loss at INR 86 crore

Commenting on the results, A.S Lakshminarayanan, MD and CEO, Tata Communications, said, "We are living in extraordinary times with the COVID-19 pandemic continuing to disrupt businesses at large. At Tata Communications, we are enabling smooth and continued operations of services for our customers, delivering service upgrades and changes in record speed, as they implement work from home measures and shift workloads seamlessly across borders as part of their business continuity plans. We are also helping our large customers and partners to rapidly expand network capacity to serve the need of their own customers. The agility, service quality and responsiveness of our teams is being recognised by our customers who continue to show their appreciation. Our customer satisfaction score during this time has seen a record high - contributing to a top quartile Net Promotor Score (NPS).

As enterprises adapt and find a new equilibrium in this contact-free economy, Tata Communications is delivering secure connected digital experiences to enable them to unlock the economic value and the potential that digital transformation provides. Our platforms, solutions and services are not only enabling tens of thousands of employees of our enterprise customers to work from home, collaborate, improve productivity, and maintain business continuity, they are also keeping people and societies connected. We are proud of the work our teams have been doing in this crisis. The business results and the response from our customers are a testament to Tata Communications' role as a key enabler in our customers' digital future."

Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said, "We have registered another quarter of robust growth in these tough times with all our financial and operating metrics tracking in the right direction.

We witnessed strong profitable growth in our Data business; in FY20, EBITDA margins for Data business expanded by 310 BPs coming in at 22.1% on the back of Growth services' delivering INR 199 crore of EBITDA for the year. We continue to drive the business towards sustainable profitability and positive cashflows."

Shares of TATA COMMUNICATIONS LTD. was last trading in BSE at Rs.483.75 as compared to the previous close of Rs. 461.05. The total number of shares traded during the day was 32400 in over 1551 trades.

The stock hit an intraday high of Rs. 492.5 and intraday low of 447. The net turnover during the day was Rs. 15425503.

Source : Equity Bulls

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