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Tata Communications’ overseas revenues continue to outgrow India: CEO

Tata Communications, the telecom, cloud and media arm of the Tata Group, has continued to outperform Indian revenue for three consecutive quarters, at a ratio of 58:42 as of June 24, ASi CEO Lakshminarayanan told ET.

“We are a contender in the US and European markets, so we have a much bigger empty space to hunt and that’s why we started two years ago to make all these investments in sales and marketing and our products. All of that has started to pay off dividends and we are happy to see the results,” the executive said in a virtual chat after the company reported its first quarter results in 2015.

At the same time we are already a leader in India, our goal is to maintain the leadership position and grow the Indian business, he added.

For April-June 2024, the company’s net profit decreased by. 12.78% to Rs 332.93 crore, which corresponds to Rs 381.75 crore a year earlier. During the quarter, profit grew by 3.54% from Rs 321.52 crore in the quarter ended March.

“Our subsidiary TCTS, the exchange service, the ATM business all reduced profit and we merged them. Second, we did two big MandA deals last year, so we paid due diligence, advisory fees, etc. And the third. is that these acquisitions were not profitable, which had a dilutive effect on EBITA,” said Lakshminarayanan.

Tata Communications acquired New York-based video production and distribution company The Switch Enterprises LLC and messaging platform Kaleyra.

While the acquisitions have increased margin pressure on the company’s profitability, the CEO expects both companies to be profitable next year.

The board of Tata Communications on Thursday approved a proposal to raise Rs 2,000 crore by issuing non-convertible debentures through a private placement.
This is being done to refinance some future loans and business will continue as usual, he said. “We do not intend to use these funds for investments or new investments.”

Separately, the board also approved an investment of $26.8 million (Rs 223.44 billion) to fully sell its subsidiary Tata Communications (UK) Limited (TC UK).

“This is part of our global restructuring plan to ensure that all subsidies are paid correctly,” Lakshminarayanan said. – We recently announced the same to Switzerland and Bermuda. We are doing this to improve tax efficiency and be more efficient in any future acquisitions.”

In the first quarter of 2025, Tata Communications reported operating income of 5,659.71 billion rupees, up 14.1% than 2025. the first quarter of 2016, but decreased by 1.55% from the previous quarter. It also reported an extraordinary profit of 85.71 crores. The company’s data services revenue, which represents 90 percent, was slightly higher at 4,709.31 crore in the said quarter., personnel and finance costs continued to put pressure on turnover and profitability.

Shares of Tata Communications rose 0.76% to Rs 1,865 on the BSE on Thursday. The results were released after market hours.

The company also announced that it will grant 34,707 employee stock options with a face value of 10 rupees to eligible employees.

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