Results: Tata Communications Q4 net profit at Rs 299 crore
Results: Tata Communications Q4 net profit at Rs 299 crore

Tata Communications on Wednesday posted a consolidated net profit of about Rs 299 crore for the fourth quarter ended March 2021 against a loss of Rs 275 crore a year ago, while a "strong operating performance" for FY21 drove the "highest profit" in last 11 years.

The company's board has recommended a dividend of Rs 14 per share.

The net profit for Q4 FY21 stood at Rs 299.2 crore compared to a loss of Rs 275 crore in the same period previous year, on the back of lower expenses.

Also, there was an exceptional loss in the March 2020 quarter, that was largely on account of provision towards license fee (Rs 341.6 crore).

On the statutory dues matter, it said during the quarter ended March 31, 2021, the company has made a payment of Rs 379.5 crore "under protest" to Department of Telecom (DoT).

Further, with respect to demand for amount of Rs 1,199.7 crore, the company said it has existing appeals relating to its ILD and NLD (international and national long distance) licences which were filed in the past and are pending at Supreme Court and Madras High Court, and the company's appeals were not included in the apex court's 2019 ruling on AGR.

The company "believes that all its licenses are different from UASL (Unified Access Service License), which was the subject matter of Supreme Court judgement of October 24, 2019".

"The company has responded to the DoT denying and disputing the amounts claimed by the DoT in the above mentioned demands," it said in a regulatory filing.

Stating that the company had not received any response from the Telecom Department after the submission, Tata Communications said it "believes that it will be able to defend its position and also has obtained a legal opinion in this regard. Accordingly, the company has assessed the balance demand of Rs 119973 lakhs as part of contingent liability".

During the quarter ended September 30, 2019, the company had received demands from DoT aggregating to Rs 6,633.4 crore towards licence fee on its Adjusted Gross Revenue (AGR) for the financial years 2006-07 till 2017-18, it said.

For Q4 FY21, the consolidated revenue was at Rs 4,073 crore, down 7.4 per cent year-on-year.

"This has been largely due to degrowth in voice business and data business," Tata Communications said in a statement.

Data revenue was at Rs 3,515 crore, down by 2.2 per cent year-on-year, the reduction "primarily due to longer deal conversion and execution cycle due to COVID-19 and moderation of UCC traffic", it said.

The company said it maintained profitability despite slower revenue growth.

For the full year FY21, net profit was at Rs 1,251 crore compared to a loss of Rs 86 crore in FY20 "due to strong operating performance during the year".

"This has been the highest profit in last 11 years, translating into an EPS of Rs 44 per share," the statement said.

For FY21, the consolidated revenue stood at Rs 17,100 crore, up by 0.2 per cent on previous year.

"Business environment has been impacted due to pandemic and this has also affected our growth," it said.

Tata Communications MD and CEO A S Lakshminarayanan said execution on financial fitness is yielding good results and the shifts from products to platforms, deeper customer engagements are a work in progress.

The company anticipates continued progress on these strategic levers to achieve its goals, he added.

"FY21 has been a great year; making excellent progress on our well-defined strategy," Lakshminarayanan said.

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