Tata Communications reported a 27% year-on-year (YoY) decline in net profit for the September quarter, even as revenue grew steadily, weighed down by margin compression and higher costs.
The company’s profit after tax (PAT) stood at Rs 183 crore in Q2 FY26, down from Rs 251 crore in the same period last year. The PAT margin fell to 3%, a decline of 138 basis points (bps) from 4.4% a year ago.
Consolidated gross revenue rose 6.5% YoY to Rs 6,100 crore, compared to Rs 5,728 crore in Q2 FY25. Data services — a key growth driver — grew 7.3% YoY to Rs 5,179 crore from Rs 4,826 crore in the corresponding quarter last year.
EBITDA rises, EBITDA margin narrows:
EBITDA increased 3.9% YoY to Rs 1,174 crore, but the EBITDA margin narrowed by 48 bps to 19.2%, against 19.7% in the previous year. Sequentially, the company reported an improvement in data EBITDA margin, which rose 140 bps to 18.6%.
Tata Communications said its digital portfolio continued to drive momentum, recording 14.9% YoY growth during the quarter.
What Tata Communications CEO said:
A.S. Lakshminarayanan, Managing Director and CEO, said, "We have sustained momentum this quarter, led by healthy double-digit growth in our digital portfolio. The period has also marked some significant wins in government projects, advancing our role in Digital India. Our newly launched products in strategic areas like Voice AI and Cloud Networking are generating strong interest and adoption among customers."
Kabir Ahmed Shakir, Chief Financial Officer, added, "Our Q2 results demonstrate strong operational discipline, with Data EBITDA margins improving sequentially and reflecting the resilience of our core business. As we enter the second half of the fiscal, we expect our strategic bets to enhance profitability and margin strength while continuing to deliver long-term value for stakeholders."
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