Tata Communications Ltd.'s third quarter net profit tumbled, missing analysts' estimates.
The company's net profit declined 79.6% to Rs 45.1 crore, according to an exchange filing. Analysts tracked by Bloomberg had estimated it at Rs 265.17 crore.
Its total expenses rose 15% sequentially to Rs 5,305.47 crore.
Tata Communications Q3 FY24 (QoQ)
Revenue rose 15.6% to Rs 5,633.3 crore, as compared with a forecast of Rs 5,701.97 crore.
Ebitda gained 11.7% to Rs 1,134.3 crore, as against an estimate of Rs 1,029.67 crore.
Margin was at 20.13% vs 20.84%.
Following the Oct. 16 Supreme Court ruling that held that licence fee paid at regular intervals should be classified as capital expenditure, the telecom company said that it created a tax provision for Rs 185.52 crore towards interest and Rs 21.09 crore towards tax (net), due to change in effective tax rate on account of adoption of new tax regime. This was recorded as an exceptional item in the profit and loss statement.
Even though the company is not a party to the above judgement and its case is "different and distinguishable" from the above judgment, as a matter of prudence, the company said it has recorded the provision.
Shares of Tata Communications closed 6% higher on Thursday, as compared with a 0.43% decline in the benchmark Nifty 50.
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