Tata Communications Posts Dramatic Profit Surge Amid Strategic Expansions

Tata Communications reported a net profit of Rs 761.17 crore in the March quarter, more than doubling from the previous year, thanks to significant asset sales. The company plans to increase capital expenditure to over USD 300 million by FY26 and aims to expand profit margins within two years.

Tata Communications reported a significant surge in net profit for the March quarter, rising to Rs 761.17 crore, a more than two-fold increase from the previous year. This impressive growth was largely due to a one-time gain from selling a land parcel in Chennai and offloading its stake in Tata Communications Payments Solutions.

Looking ahead, the company plans to escalate its capital expenditure to beyond USD 300 million by the fiscal year 2026, up from USD 265-270 million anticipated for FY25. Chief Financial Officer Kabir Ahmed Shaikh noted that despite increased spending, the company will strive to enhance its pre-tax profit margins to the 23-25 percent range within two years.

Whilst total revenues rose by 6.34 percent year-on-year to Rs 6,059 crore, expenses also climbed 5.87 percent to Rs 5,723.2 crore. Although profit margins tightened slightly compared to the previous quarter, executives remain optimistic about shareholder value, announcing potential stake dilution to manage losses and strategic investments like undersea cables and cloud platforms. The company's shares rose 1.48 percent to close at Rs 1,597.85 on the BSE.

(With inputs from agencies.)