Tata Communications On Wednesday, it reported a 30% drop in first quarter profit due to higher interest cost and lower foreign exchange gain.
Consolidated net profit for the quarter ended June 30 was 3.82 billion rupees ($46.6 million), compared with 5.44 billion rupees a year earlier.
The company also plans to raise up to Rs 18 billion through private placement of non-convertible debentures.
The total expenditure increased by about 16% to Rs 44.58 billion due to increase in network and transmission costs.
The cost bump drove a nearly 11% rise in income from operations to Rs 47.71 billion due to the expansion of the core data services segment.
The company, which has been on an acquisition spree to expand its offerings, said in June that it aims to double its data business revenue over the next four years.
In December, it acquired American video production firm The Switch Enterprises, and in June it bought US-based communications platform provider Calera. In a deal worth around $100 million.
Bye Sanchar is focusing on revenue over margin as it seeks to capture a larger share of the highly competitive market for cloud, cyber security and networking.
“We are well on track with the execution of our strategy and the strengthening of our portfolio will drive increased relevance with our enterprise customers,” Managing Director and Chief Executive Officer AS Lakshminarayanan said in a statement.
In April, the company reported that margins for this fiscal year could be lower than its previous estimate of 23-25%. However, analysts have said that after several loss-making acquisitions, margins may come under pressure.
Margin on earnings before interest, taxes, depreciation and amortization (EBITDA) fell 352 basis points to 21.5% last quarter. Sequentially it declined by 117 bps.
The company is now in a position to fund investments and acquisitions “while focusing on a healthy balance sheet,” said Kabir Ahmed Shakir, chief financial officer.
Tata Communications shares closed up 1.03% ahead of the results.
Consolidated net profit for the quarter ended June 30 was 3.82 billion rupees ($46.6 million), compared with 5.44 billion rupees a year earlier.
The company also plans to raise up to Rs 18 billion through private placement of non-convertible debentures.
The total expenditure increased by about 16% to Rs 44.58 billion due to increase in network and transmission costs.
The cost bump drove a nearly 11% rise in income from operations to Rs 47.71 billion due to the expansion of the core data services segment.
The company, which has been on an acquisition spree to expand its offerings, said in June that it aims to double its data business revenue over the next four years.
In December, it acquired American video production firm The Switch Enterprises, and in June it bought US-based communications platform provider Calera. In a deal worth around $100 million.
Bye Sanchar is focusing on revenue over margin as it seeks to capture a larger share of the highly competitive market for cloud, cyber security and networking.
“We are well on track with the execution of our strategy and the strengthening of our portfolio will drive increased relevance with our enterprise customers,” Managing Director and Chief Executive Officer AS Lakshminarayanan said in a statement.
In April, the company reported that margins for this fiscal year could be lower than its previous estimate of 23-25%. However, analysts have said that after several loss-making acquisitions, margins may come under pressure.
Margin on earnings before interest, taxes, depreciation and amortization (EBITDA) fell 352 basis points to 21.5% last quarter. Sequentially it declined by 117 bps.
The company is now in a position to fund investments and acquisitions “while focusing on a healthy balance sheet,” said Kabir Ahmed Shakir, chief financial officer.
Tata Communications shares closed up 1.03% ahead of the results.