Tata Communications (TATACOMM) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 saw strong digital and international revenue growth, improved EBITDA margins, and robust free cash flow, with strategic asset reviews and divestments progressing well.

• Sale of TCPSL stake and payment solutions business, with plans to infuse external capital into NetFoundry, support focus on core business and margin improvement.

• PAT increased 12.9% quarter-on-quarter to INR 256.6 crores, and EBITDA margin improved to 20.4% from 20.1% YoY.

• Strategic review and restructuring of subsidiaries, including simplification of group structure and direct ownership of Tata Communications (Netherlands) B.V.

• Notable wins in the UK, Ireland, and Americas, and awards for digital services and corporate responsibility.

Financial highlights

• Consolidated revenue reached INR 5,798 crores, up 2.9% year-on-year and 0.5% quarter-on-quarter.

• EBITDA was INR 1,181 crores, up 4.1% year-on-year and 5.7% quarter-on-quarter; EBITDA margin at 20.4%.

• PAT stood at INR 256.6 crores, up 12.9% quarter-on-quarter; PAT margin rose to 4.4% from 0.8% YoY.

• Free cash flow was INR 841 crores, highest in 10 quarters, reversing negative FCF from previous quarters.

• Total comprehensive income for the quarter reached INR 346.70 crores.

Outlook and guidance

• Management remains confident in strategy, with a robust deal funnel and double-digit YTD order book growth.

• FY27 revenue doubling ambition remains, but timing depends on macro conditions; margin target of 23%-25% in two years.

• No formal guidance for FY26, but tailwinds include strong order book and product acceptance; headwinds include price erosion and market churn.

• Focus on optimizing subsidiary performance, unlocking value, and continued investments in digital infrastructure.

• Ongoing strategic evaluation of assets and disciplined capital allocation to drive sustainable value.