TATA COMMUNICATIONS

Tata Communications did well yesterday after it announced that it has completed a sale transaction of the land parcel and building situated at Nungambakkam, Chennai, for a transaction value of Rs. 192.30 crore. This land parcel and building was earlier being used as a staff housing colony. The company has received the payment of entire amount. The above transaction is in line with the Company's objective of monetizing its non-core assets. The company is working on cost optimization and it undertook staff optimization initiative in Q3FY13 and some benefits are expected to accrue in Q4 though full benefit will only reflect beginning Q1FY14. It’s indirect foreign subsidiary issued a Singapore $250mn three-year bond at a coupon rate of 4.25% in January, 2013 and it was oversubscribed 14 times. Money raised is to be used for repayment of existing high cost debt. Company’s attempts to reduce debt is now visible in the interest outgo, which in current Q3 at Rs.189 crore was down 10% QoQ.  The coming quarters could indeed turn out  to be interesting!

And for Q3FY13, it posted back of better than expected losses! The consolidated net loss for Q3FY13 came in at Rs.201 crore compared to Rs.274 crore in Q2FY13. Its net revenue rose 4% (QoQ) at Rs.4434 crore. Global voice solutions (GVS) sequentially showed a 5% rise in revenue and its EBIT margin grew from 15% to 16%. Global data and managed services business showed a 4% QoQ rise in revenue and it maintained its EBIT margin at 70%. Its South African operations through its subsidiary company Neotel did not do as well as expected with sequential revenue falling 1% and EBIT margin slipped from 4% to 0.47%.