Tata Comm Q1 FY27 Results (NSE: TATACOMM)
Signal: Steady quarter
The read
Revenue growth was healthy at 10.5% YoY, but EBITDA margin contracted 48bps to 18.9% as network costs outpaced revenue; PAT of ₹134 Cr was depressed by exceptional charges of ₹106 Cr (staff optimisation, fire incident, contract provision), without which operating profit would have grown modestly; the quality of earnings is clouded by one-offs and rising bad debts in standalone (8.10% ratio).
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,582.82 Cr | 10.5% | 0.4% |
| EBIT | ₹503.64 Cr | 3.2% | |
| Net profit | ₹134.23 Cr | -29.4% | |
| EPS | ₹4.71 | -29.4% | |
| EBIT margin | 18.9% |
P&L walk
Revenue growth driven by Data Services and Campaign Registry; gross margin compressed ~200bps YoY as network costs outpaced revenue, while employee costs were stable; EBITDA margin fell 48bps; PAT decline driven entirely by exceptional charges (₹106.36 Cr) – operating profit before exceptional rose modestly.
Segments
Data Services (87% of revenue) grew 10.7% YoY, but its segment result grew only 4.7% YoY, indicating margin compression; Campaign Registry surged 36.6% YoY with high profitability (result margin 56.9%); Voice continued to decline (-3.2%); standalone vs consolidated gap remains large (standalone PAT ₹104 Cr vs consolidated ₹134 Cr), reflecting positive contribution from subsidiaries.
Key positives
- Data Services revenue grew 10.7% YoY, maintaining 87% revenue share.
- Campaign Registry revenue surged 36.6% YoY to ₹258.70 Cr, a high-margin segment (57% segment result margin).
- EBITDA before exceptional grew 7.7% YoY to ₹1,243.08 Cr, indicating operational resilience.
Key concerns
- Gross margin contracted ~200bps YoY as network costs grew 15.2% vs revenue 10.5%.
- PAT fell 29.4% YoY due to exceptional charges of ₹106.36 Cr (50.3% of PBT), including fire loss and contractual provision.
- Standalone bad debts to receivables ratio jumped to 8.10% from 1.90% in previous quarter (₹116.73 Cr written off).
Earnings quality: includes an exceptional item
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