Q4FY21 and FY21 result analysis of Tata Communications

Revenue

• For Q4 FY21, company reported revenue to the extent of Rs. 4073 crores. It declined by 7.4% YoY and 3.5% QoQ.
• Revenue from voice solutions stood close to Rs.558 crores and declined by almost 30% YoY on account of degrowth in voice business, longer than expected deal conversion cycle.
• Revenue from the Data & Managed services segment was in line with the last quarter’s revenue numbers and stood close to Rs.3430 crores.
• Revenue from payment solutions was merely Rs.46 crores, a decline of 44% YoY and 22.3% QoQ. Business was disrupted on account of the second wave of the pandemic.

EBIT

• Q4 FY21 operating profit was almost Rs.420 crores, a spike of almost 131% YoY on the back of strong focus on operating structures and cost efficiencies.
• As a result of this, EBIT margins improved by 620 bps and stood at 10.3%.
• Data & Managed Services witnessed a rise in EBIT numbers from Rs.140 crores in Q4 FY20 to Rs.381 crores in Q4 FY21, an increase of 172% YoY.
• Cost saving strategies also helped the Payment Solutions division to improve their operating profit numbers during the quarter.

Declining finance cost will put lower pressure on the earnings and would help the company get a better valuation in the markets. Finance cost declined by 24.4% YoY and stood at Rs.93.1 crores for Q4 FY21.

Overall PAT numbers declined by 3.2% QoQ and net income for the quarter was close to Rs.299 crores. 

Detailed Q4FY21 and FY21 Results Analysis