Why Did Tata Communications’ Q2 Net Profit Drop Over 19% to Rs 183 Crore?
Click to start listening
Synopsis
Tata Communications reports a Q2 profit of Rs 183.21 crore, a decline of over 19% YoY. Despite this drop, revenue growth remains steady. The CEO highlights significant advancements in digital services and government projects, showcasing the company's resilience and future potential. Explore how Tata Communications plans to optimize growth and profitability.
Key Takeaways
- Q2 net profit: Rs 183.21 crore, down over 19% YoY.
- Gross revenue: Rs 6,100 crore, up 6.5% YoY.
- Data revenue: Increased 7.3% YoY to Rs 5,179 crore.
- EBITDA: Grew 3.9% to Rs 1,174 crore.
- Future outlook: Strategic initiatives to boost profitability.
New Delhi, Oct 15 (NationPress) Tata Communications announced a consolidated net profit of Rs 183.21 crore for the quarter ending September 30 (Q2 FY26), reflecting a drop of more than 19.3% year-on-year (YoY) from Rs 227.27 crore reported in the same quarter of the previous financial year (Q2 FY25).
Sequentially, the company’s profit fell by 3.64% from Rs 190.14 crore in the June quarter (Q1 FY26), as per its stock exchange announcement.
Profit after tax (PAT) from ongoing operations reached Rs 183.21 crore, down 27% YoY and 21% quarter-on-quarter (QoQ), according to the exchange filing.
Despite the downturn in profit, Tata Communications experienced solid revenue growth in this quarter.
The company reported gross revenue of Rs 6,100 crore, which is an increase of 6.5% from Rs 5,728 crore in the same period last year.
Data revenue surged 7.3% YoY to Rs 5,179 crore, while operating profit (EBITDA) rose 3.9% to Rs 1,174 crore.
However, the EBITDA margin decreased by 48 basis points (bps) to 19.2%, and the PAT margin fell by 138 bps to 3%, according to the filing.
Reflecting on the quarterly results, A.S. Lakshminarayanan, Managing Director and CEO of Tata Communications, stated that the company sustained its momentum driven by robust growth in its digital services.
“This quarter highlighted significant achievements in government initiatives, reinforcing our contribution to Digital India. Our new solutions, including Voice AI and Cloud Networking, are gaining substantial interest from clients,” he commented.
Kabir Ahmed Shakir, Chief Financial Officer, noted that the results demonstrated strong operational discipline and improving margins within the company’s data sector.
“As we move into the latter half of the fiscal year, we anticipate that our strategic initiatives will further boost profitability and enhance margins,” he added.
Post the earnings report, shares of Tata Communications were trading approximately 4% higher at Rs 1,946 per share on the NSE.
The company expressed confidence in its ability to maintain growth, optimize capital efficiency, and deliver long-term value for its stakeholders in the upcoming quarters.
Point of View
We recognize the importance of Tata Communications in India's digital landscape. Their commitment to growth, despite recent profit declines, reflects resilience and strategic foresight. The advancements in digital services are commendable, and we look forward to seeing how these efforts shape the future of the company and contribute to India's digital economy.
NationPress
15/10/2025
Frequently Asked Questions
What caused Tata Communications' profit decline in Q2?
The decline in profit is attributed to several factors, including competitive market pressures and increased operational costs, despite strong revenue growth in their digital portfolio.
How did Tata Communications perform in terms of revenue?
Tata Communications reported a gross revenue of Rs 6,100 crore, marking a 6.5% increase from the previous year, indicating robust growth in their digital services.
What are the future expectations for Tata Communications?
The company expects to enhance profitability and strengthen margins through strategic initiatives and continued focus on digital offerings.
