Tata Communications Profit Declines After Voice Calling Revenue Falls

Tata Communications posted a 3.5 percent decline in profit for the June-ended quarter, missing street estimates.

The telecom company of the Tata Group saw its net profit fall to Rs 41.8 crore from Rs 43.3 crore on a year-on-year basis. The consensus of analyst estimates tracked by Bloomberg stood at Rs 47.9 crore.

Revenue for the April-June quarter decreased 3.3 percent to Rs 5031.7 crore against Rs 5206 crore in the same quarter last year. The Bloomberg consensus estimate was Rs 5225.5 crore.

The margin for earnings before interest, taxes, depreciation and amortisation expanded by 260 basis points to 17.1 percent against 14.5 percent in July 2015.

The company’s shrinking revenue share from the voice solutions segment contributed to the decline in profit. The voice solutions revenue dropped 14.8 percent to Rs 1,801.8 crore from Rs 2,116 crore.

Data services however contributed Rs 2,505 crore as compared to Rs 2,217.4 crore in the same quarter of the previous year, growing almost 13 percent.

The company’s evolution with macro trends will help in future growth, Vinod Kumar, managing director and chief executive officer of Tata Communications said in the press release.