Tata Communications today announces its financial results for the quarter ended September 30th, 2020.

Highlights|Q2 FY2021

Data services portfolio

·      Robust growth in Data business; revenue grew by +7.2% YoY on the back of strong performance across segments.

·      Data EBITDA was at INR 1,108 crore (USD 149 Mn); up +47.2% YoY with the margin expansion of 830 Bps YoY led by strong profitable growth in Data business and cost efficiency initiatives.

·      The pace of digital adoption has increased. Remote working, cloud adoption and greater use of digital applications are driving the demand for our services. Our India enterprise business grew by 5.1% YoY and international enterprise business grew by 16.4% YoY. This has led to increase in both revenue as well as profitability.

Consolidated financial highlights

·      Consolidated revenue was at INR 4,401 crore (USD 591 Mn); up +3.0% YoY on the back of growth in Data business.

·      Consolidated EBITDA was at INR 1,158 crore (USD 155 Mn); increase of +38.9% YoY and margin expansion of 680 Bps as a result of strong profitable growth in data business and focus on operational efficiencies.

·      Consolidated PAT at INR 384 crore (USD 52 Mn) as compared to a profit of INR 54 crore (USD 8Mn) in Q2 FY20; growth of +613% YoY.

·      Net debt at the end of Q2 was INR 8,631 crore as compared to INR 9,008 crore in Q1 FY21; reduction of INR 377 crore despite dividend payment of INR 114 crore during this quarter. Net debt to EBITDA (TTM) is now at 2.3 times as compared to 2.8 times for the same period last year.

·      CAPEX for this quarter was INR 318 crore as compared to INR 372 crore in Q1 FY21.

Commenting on the results, A.S Lakshminarayanan, MD and CEO, Tata Communications, said: “We have had a strong performance in Q2, as we continue to deepen our customer engagements and support enterprises to seamlessly embark and advance on their digital transformation journeys. Leveraging the shift to cloud-first, internet-first strategies, we are innovating across our portfolio to offer solutions that are tailored to this new digital-first world. We see great opportunities ahead, as organisations look to harness the power of technology to transform their business models and drive competitive differentiation and sustainable development.”

Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said: “Data business continues to grow at a healthy pace and profitability has improved due to our focus on operational efficiencies. Our margins have expanded, and we have witnessed 3 successive quarters of double-digit EBITDA growth leading to strong PAT. There has been a robust improvement across all financial parameters; our profitability and cash flow generation has improved significantly in the last few quarters leading to a stronger balance sheet for the future.”

An investor fact sheet providing detailed analysis of the results for the quarter ended September 30^th, 2020 has been uploaded on the Tata Communications website and can be accessed here.

Business highlights | Q2 FY2021

Customer wins in Q2:

·       Croma, a Tata group company and one of India’s leading consumer durables and electronics retailer, is able to bring the assisted selling experience of their physical store to the customer’s home digitally with Tata Communications Digital Customer Experience Platform (Tata Communications Store At Home). Part of our Secure Connected Digital Experience (SCDx) proposition, the customer experience platform enables growth for enterprises like Croma by helping them make the shift to video commerce and contactless experiences for their customers.

Customers experience in-store personalised buying by virtually connecting with Croma’s intelligently identified product specialists to browse products, offers and payment options through this solution. A Croma associate can co-browse the website along with the customer; play pre-recorded, high quality product demos, while having the platform open for conversation and live demonstration of products from the store. This helps consumers make informed yet seamless purchases over a video call, in real-time. Within the first week of launch, Croma has already witnessed a healthy customer conversion rate of 20%. This is a great validation of Tata Communications’ vision of creating a platform that combines the personalisation of an in-store experience with the ease of buying digitally from anywhere. For Croma, this new sales channel will help in further strengthening its leadership position in the omni-channel retailing space.

·       In Q2 FY21, Tata Communications continued its relationship with Star India Pvt Ltd, (one of the leading media houses of India), for the third year, to help them with the production and live broadcast of IPL 2020 tournament to fans globally. While the action is happening amidst these challenging times, Indian cricket fans continue to enjoy the same superior video quality resolution and near real time viewing experience with our cutting-edge, ultra-low latency managed service for LIVE video broadcast - Video Connect. With our solution, Star is broadcasting and streaming the matches in English, Hindi and seven other regional languages, with the capability to add many more. Our media solution supports Star with satellite-based distribution of the IPL world feed to various global broadcasters from the site. It gives them the flexibility to capture and deliver the programming, across all IPL matches, with a reduced crew of on-site operators, and with 24*7 service management.

·       De Tune, a global media services company whose customers include a wide variety of corporate clients and some of the largest eSports tournaments in the world, has selected Tata Communications as the architect of a high-quality broadcast viewing experience for live events produced virtually anywhere on the globe. De Tune has been able to simplify their global production operations by consolidating multiple vendors into one cohesive media ecosystem with the help of Tata Communications’ end-to-end live video services.

As a pioneer in the remote broadcasting industry, De Tune sourced forty-plus feeds from across Europe, South Korea, Taiwan, and Singapore, bringing them back to a Los Angeles based studio for production then streamed the finished product to twenty-two global outlets in near real-time. Leveraging Tata Communications’ Media Cloud, De Tune has automated its production workflow along with video format conversions and online content delivery by accessing our transcoding services and Video Content Delivery Network (CDN). This next-generation media ecosystem has enabled De Tune to effectively collaborate, allocate resources, and allow aggressive scaling in their operations with global reach.

·       Tata Communications is enabling Victor Mobile, to launch customised pre-paid, post-paid and hybrid mobile plans (voice, data, SMS and media content) for subscribers across countries, starting with UK, with our cloud-based Tata Communications MOVE^TM platform. Victor Mobile, who envisions to become one of the world’s largest multi-play MVNO (Mobile Virtual Network Operator), will be able to scale and launch their MVNO operations to other parts of the world with faster time-to-market with Tata Communications  MOVE^TM MVNE (Mobile Virtual Network Enabler) services, which leverages our strong network infrastructure to integrate with leading mobile network operators, using their cellular services. This will help Victor Mobile deliver better speed and voice quality for its customers. Victor Mobile also plans to offer their medium and large enterprise customers our IoT based connectivity services through Tata Communications MOVE^TM platform.

Awards: Best employer

·       Recognised as one of the Best Companies for Women in India by Working Mother and Avtar for fifth year in a row

Awards: Analyst recognition

·       Omdia: Market leader in remote IP Production for our media specific Remote Production offering

·       Frost and Sullivan Award: Asia-Pacific Managed UC Services Provider of the Year 2020

·       Leader in Global Data Wholesale Antifraud Competitive Landscape Assessment 2020  

·       Forrester Now Tech: European Managed Security Services Providers - mid size & Managed Security Service Providers in APAC- large vendors

·       Major Player in IDC MarketScape: Worldwide Managed SDWAN Vendor Assessment 2020

Awards: Industry recognition

·       Carrier Community- Global Awards 2020: Winner of Customer Experience Excellence Award

·       The Peak – Tech Laureates 2020, Connectivity category

·       ET Telecom Awards 2020:

o   Best Enterprise Service Provider

o   Best Enterprise Network Transformation Provider

o   Best Enterprise Managed Security Services Provider

New launches:

o         Tata Communications launched ‘Secure Connected Digital Experience’ to help enterprises rebuild and reset for a post-COVID world: Tata Communications launched the  ‘Secure Connected Digital Experience’ (SCDx) to  meet the growing, worldwide demand for new ways of operating, which includes far higher levels of working from home, rising security risks, a shift to digital commerce and more contactless experiences for employees, customers and supply chain partners.

o        Tata Communications secured local telecom license in the Kingdom of Saudi Arabia:

o         Tata Communications secured a Type B telecom license in the Kingdom of Saudi Arabia (KSA). The license entitles Tata Communications to provide Internet Service Provider (ISP) and related telecom services to enterprises in a defined capacity, along with local currency billing for end-customers in KSA. This will enable the company to make the shift from offering services as a foreign carrier in the Middle East to a local licensed service provider.