Tata Communications on Tuesday posted a more than two-fold increase in net profit to Rs 761.17 crore during the March quarter, helped by a one-off gain through the sale of a Chennai land parcel to an associate company.
The company had posted a consolidated profit of Rs 354.57 crore in the year-ago period, it said in a filing to the exchanges.
The company is aiming to accelerate its capital expenditure to over USD 300 million in FY26 from the USD 265-270 million in FY25, its Chief Financial Officer Kabir Ahmed Shaikh told PTI.
He said even as it spends more on investments, it will expand the pre-tax profit margins, and ensure they get into the 23-25 per cent range in two years from the 19.8 per cent in the March quarter.
Shaikh said the profit margins have narrowed as compared to the October-December period.
In the reporting quarter, its revenues grew 6.34 per cent on-year to Rs 6,059 crore, while the expenses were up 5.87 per cent to Rs 5,723.2 crore.
There was a gain of Rs 577 crore through the sale of the Chennai land, which helped the company post the high jump in net profits.
Besides, there was a gain of Rs 311 crore through the sale of entire stake in Tata Communications Payments Solutions, the company informed the exchanges.
Tata Communications is also mulling stake dilution to a loss-making foreign subsidiary under the data services vertical, it said, adding that this arm suffered a loss of Rs 105 crore on a Rs 33 crore revenue in FY25.
Shaikh declined to share its aims for the new fiscal year from a business growth perspective, adding that the same will be disclosed at an investor day later this quarter.
The company is also likely to defer its ambition of doubling revenues in two years announced in January, the CFO said, pointing out that the revised timeline will be disclosed at the investor day.
It had announced the aim to double revenues to Rs 28,000 crore by FY27 in January this year. It closed FY25 with a topline of Rs 23,238 crore.
Shaikh said the capital expenditure will be focused on maintenance-related expenses that are capped at under 2 per cent of revenues, customer successes and also strategic capex on aspects like putting up an undersea cable or cloud platform.
The company's overall debt stood at Rs 9,377 crore as of March 31, and it is planning to reduce the net debt to pre-tax profit ratio to under two times by September.
The Tata Communications scrip closed 1.48 per cent up at Rs 1,597.85 apiece on the BSE on Monday, as against gains of 0.24 per cent on the benchmark.
