TATA COMMUNICATIONS

Tata Communications declared a set of dismal numbers for Q2FY13. Its consolidated net loss for the quarter widened to Rs.273.20 crore v/s Rs.165.20 crore on a YoY, and on QoQ, it was up from Rs.143 crore. Revenue for the quarter was up 27% at Rs.4271 crore. The company incurred a one-time actuarial loss on the Canada pension fund. Profitability was also hit by some unfavourable settlements in global voice services and spending on product creation, marketing and innovation. The company was also impacted due to some regulatory changes that translated into an additional increase in licence fee from 6% to 7% and in 2013, it is expected to increase further to 8%. An increase in the Wimax charges as well did not help matters.

The good news in the company was that its South African operations, through its company Neotel were good, with the company’s EBIDTA turning around. Revenues from South Africa rose 5%. Income from global voice operations rose 34% (YoY) though, Net revenue per minute (NRPM), sequentially declined due to one-offs. For now, there is not much optimism around the company as a stock and unless the market gets sure signs of a recovery, a promise to return to the black, the stock could see some more pummeling.