Tata Communications (TATACOMM) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue for Q2 FY25 rose 18.4% year-on-year to INR 5,767 crore, driven by data and digital portfolios, with digital portfolio revenue up 52.4% YoY and now comprising 46% of data revenue.

• EBITDA increased 10% YoY to INR 1,117 crore, while PAT grew 3% YoY to INR 227 crore; EBITDA margin was 19.4%, impacted by Red Sea cable cut-related costs, which are now resolved.

• Order book increased over 25% year-on-year, with international regions achieving the highest quarterly order booking in five years.

• Strategic wins and expanded order book, with continued focus on digital transformation and land monetisation to support future growth.

• Asset monetization efforts continue, including a proposed land sale in Ambattur, Chennai, expected to yield INR 750-850 crores.

Financial highlights

• Data revenue for the quarter was INR 4,834 crores, up 21% year-on-year and 3% quarter-on-quarter.

• Digital services revenue reached INR 2,221 crores, up 52.4% year-on-year and 3.6% quarter-on-quarter.

• Free cash flow was negative INR 194 crores, improved from the previous quarter, mainly due to higher working capital from dividend payouts.

• Net profit attributable to equity holders for the quarter was INR 227.23 crore, up from INR 221.26 crore YoY.

• Earnings per share (basic) for the quarter stood at INR 7.97, compared to INR 7.74 YoY.

Outlook and guidance

• Management maintains a 20% EBITDA margin ambition for FY25, with a glide path to 23-25% in two years.

• Digital portfolio growth remains a key focus, with investments in new platforms and international expansion.

• Revenue from large hyperscaler deals will begin in FY26; order-to-revenue conversion varies by portfolio.

• Asset monetization and capital allocation strategies are expected to improve leverage ratios in coming quarters.

• Ongoing execution of strategic measures, including land monetisation, to create capacity for medium- to long-term profitable growth.