Tata Communications Q1 Review - Recovery Playing Out Slowly, Steadily: Motilal Oswal
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Motilal Oswal Report
Tata Communications Ltd.’s Q1 FY22 revenue/Ebitda was up 1%/down 3% on a QoQ basis.
It reported an 8% Ebitda miss on lower data traffic, impacted by the lockdown and provisions towards a newly implemented 8% license fee on internet service provider data traffic revenues.
This marked the third straight quarter of Ebitda decline.
Tata Communications' consolidated revenues were flattish at Rs 41 billion (up 1% QoQ; 2% miss), led by 5.5% growth in the voice business, while data revenue was flat.
We revise down our Ebitda estimate by 4% for FY23 due to the stock’s lower than expected business performance, although we expect a 7%/8% revenue/Ebitda compound annual growth rate over FY21-FY23.
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