Tata Communications Q3 Results Review — A Mixed Bag; Motilal Oswal Retains 'Neutral' Stance On The Stock

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Motilal Oswal Report

Tata Communications Ltd.'s Q3 results were a mixed bag as ~10% YoY revenue growth in the Digital portfolio was offset by continued weakness in core connectivity (-1% QoQ).

Tata Communications’ adjusted Ebitda margin improved ~150bp QoQ to 20% on account of the deconsolidation of lower-margin TCPSL and NetFoundry business and slightly lower losses in the Digital portfolio. 

Tata Communications' revenue and Ebitda were boosted by Rs 285 million prior period revenue recognition. Adjusted revenue/Ebitda missed our estimates by ~3-4%, due to weaker growth in core connectivity.

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