Results for the second quarter of Tata Communications: EBITDA grew 3.9% year over year to Rs 1,174 crore, while the EBITDA margin shrank by 48 basis points.
Even though revenue increased gradually, Tata Communications’ net profit for the September quarter fell 27% year over year (YoY) due to greater expenses and margin compression.
In Q2 of FY26, the company’s profit after tax (PAT) was Rs 183 crore, compared to Rs 251 crore during the same time the previous year. From 4.4% a year ago, the PAT margin dropped 138 basis points (bps) to 3%.
Consolidated total sales increased 6.5% year over year to Rs 6,100 crore from Rs 5,728 crore in the second quarter of FY25. One of the main growth drivers, data services, increased 7.3% year over year to Rs 5,179 crore from Rs 4,826 crore in the same period the previous year.
EBITDA increases as the EBITDA margin decreases:
EBITDA grew 3.9% year over year to Rs 1,174 crore, while the EBITDA margin shrank 48 basis points to 19.2% from 19.7% the year before. The company’s data EBITDA margin improved sequentially, increasing by 140 basis points to 18.6%.
According to Tata Communications, its digital portfolio grew 14.9% year over year during the quarter, demonstrating its ongoing strength.
The CEO of Tata Communications stated:
“We have maintained momentum this quarter, driven by solid double-digit growth in our digital portfolio,” said A.S. Lakshminarayanan, Managing Director and CEO. Additionally, the time has seen several noteworthy successes in government initiatives that have advanced our position in Digital India. Customers are showing a great deal of interest in the adoption of our recently released technologies in key areas like voice artificial intelligence and cloud networking.”
“Our Q2 results show good operational discipline, with Data EBITDA margins rising sequentially and showing the stability of our core business,” said Kabir Ahmed Shakir, Chief Financial Officer. We anticipate that our strategic investments will continue to provide long-term value for stakeholders as we go into the second half of the fiscal year, increasing profitability and margin strength.