Just a day after the announcement of its Q4 results, Tata Communications share price has stayed in the green at just under 1%. Tata Communications reported a whopping increase in its net profit to ₹321.52 crore, from ₹45.1 crore in the third quarter. However, this figure was down by 1.5% from ₹326.42 crore for the same quarter a year ago. At the same time Tata Com also reported consolidated Q4 revenue rising 24.6% year-on-year to ₹5,692 crore; Ebitda increased by 2% to ₹1,056 crore. Margins on the other hand, declined to 18.6% from 22.6% a year ago and profit margins slipped 156 basis points to 5.6% for the quarter.
Tata Communications board has also recommended a dividend of ₹16.7 per share and is set to go for approval by shareholders at its Annual General Meeting (AGM).
In an interaction with Mint yesterday, MD and CEO A S Lakshminarayanan said that margin pressures are likely to continue due to its efforts to integrate its global acquisitions as well as spending to turn around some overseas operations. He also indicated that costs may stay on the higher side as Tata Com is looking to increase its reach in the foreign markets.
He also revealed the area that the company is looking to effect positive changes and that is to turn around non-profitable subsidiaries that were acting as a drag on the margins. One of the positive steps already taken was that the company exited some non-profitable contracts.
“We’ve invested in our platforms organically. We’ve also invested inorganically through a couple of large acquisitions, and people have translated into a full year of costs for us,” he revealed.
At 12:17 p.m. today, Tata Communications share price was ₹1899.30, an increase of 15.55 points (0.83%). Money Control reports that this year, it has risen over 7 percent even as the benchmark Nifty has gone up by around 2 percent. However, over the last one year, it has jumped by as much as 56 percent.
