How Tata Communications plans to chart its financial turnaround

Jun 9, 2023

By: Katya Naidu

A brand new avatar

Tata Communications which was once owned by the government and called VSNL, has since changed its avatar from a telecom service provider to offer a host of services like cloud, managed services and much more.

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The financial turnaround

In an investor presentation, the company said that its FY23 profit after tax is at 1,796 crore rupees– recovering from 86 crore rupees loss in FY20. Its margins also expanded to 24.2 percent from 19.3 percent in FY20.

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Compounded annual growth rate (CAGR)

Its earnings before interest depreciation tax and amortization (EBIDTA) has been growing at a CAGR of 9.5 percent between FY20 to FY23 while its data revenues have been growing at 5.9 percent, the company said.

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The reimagine strategy

Tata Communications is implementing a reimagine strategy across three areas – financial fitness, growth plan and culture. In the last three financial years, it added 33 new $1 million clients and 10 new $5 million clients

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Platform not just product

A part of its growth plan to shift from products to platforms and that’s aided a 10.3 percent YoY growth in data revenues. Automation, innovation and AI are at the core of its overall growth plan.

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Evolution from a platform

The company intends to evolve from a platform to a digital fabric – a move that can provide it with accelerated growth in a hyperconnected world.

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Infra, solutions & experiences

Its digital fabric is spread across connected and intelligent infrastructure, connected solutions and connected experiences. They’ll integrate with the client’s interface network with a layer of analytics and security offerings.

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Network strengths

With subsea networks, the company is connected to a third of world’s internet routes — enabling them to offer solutions across 190 countries and territories.

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Local play

Thanks to its legacy, the company also has 100 percent coverage across tier 3 and tier 4 digital ecosystems in India.

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