Tata Comm sees good growth in FY13

Moneycontrol Bureau

Tata Communications, which operates among the largest submarine cable networks, hopes to maintain a good run rate in the current financial year (2012-13), helped by expansion into new areas and strong growth in core business.

"Our growth last year has far outpaced the industry growth, here in India and abroad. We hope to maintain that growth," said MD and group CEO, Vinod Kumar.

Last year Tata Communications' revenue from global voice services rose 16% and data services revenue was up 18%.

Neotel also turned profitable at the EBITDA level in FY12.

However, the company's bottom line continues to be hit by higher expenses and finance costs.

Tata Communications fourth quarter consolidated net loss widened 67% year-on-year to Rs 261 crore. Its revenue in Jan-March was up 29% to Rs 3,961 crore.

During the quarter, the company's network costs rose 21% to Rs 2,161 crore, while finance costs increased to Rs 186 crore from Rs 107 crore.

Its loss from operations before other income, finance costs.and taxes was Rs 7.5 crore, down from Rs 37 crore loss a year ago.

Sanjay Baweja, CFO, said the company will focus on repaying debt going ahead.

Tata Communications spent 9% of its revenue on capital expenditure in FY12 and this year capex is likely to be around similar levels.

The capex will be funded via internal accruals and will be aimed at customer acquisitions, expanding capacities and 30% of total capex will be for expanding in new markets.

"In our case, largely our focus is on Middle East, Africa and South East Asia. In South East Asia, Indonesia, Malaysia, Thailand and Philippines are growth areas," Kumar said.

Tata Communications recently had looked at acquiring Cable & Wireless to leapfrog in large enterprise business overseas.

Cable & Wireless has 20% market share in large enterprises in UK.

However, it walked away from the deal after the two sides didn't agree on the final valuations.

Kumar said Tata Communications is not in active talks with anyone for acquisitions right now. The focus will be on growing organically, with an eye on opportunities whenever they come up, Kumar said.

Tata Communications shares on Tuesday closed at Rs 201 on NSE, little changed from its previous day close.

Nachiket Kelkar

nachiket.kelkar@network18online.com