Tata Communications shares gain 2% on dividend boost

Shares of Tata Communications rose nearly 2% in opening trade on Thursday after the Tata Group company released its March quarter earnings report and also announced to pay a final dividend of ₹21 per share for the financial year 2022-2023. The telecommunications company has a good dividend track report and has consistently declared dividends for the last five years. In the past 12 months, Tata Communications has paid a dividend of 207% amounting to ₹20.7 per share, while it declared 24 dividends since its inception in 1999. At the current share price, the dividend yield stood at 1.76%.

Tata Communications shares opened 1.56% lower at ₹1,175 against the previous closing price of 1193.70 on the BSE. Paring opening losses, the largecap stock surged 1.7% to hit a high of ₹1,214.25, while it jumped 3.3% from its low level on the BSE amid strong volume. In the first hour of trade so far, as many as 0.3 lakh shares changed hands over the counter compared with two week average volume of 0.2 lakh stocks, while the market capitalisation stood at ₹34,032 crore.

 In a post market filing on Wednesday, Tata Communications said that it posted a decline of 10.7% in consolidated net profit at ₹326.03 crore in Q4FY23, compared with a profit of ₹365.06 crore in the corresponding quarter last fiscal. The consolidated income from operations increased marginally to ₹4,586.66 crore during the quarter under review from ₹4,263.03 crore in the same period last year.

For the full financial year 2022-2023, the company posted 21.2% growth in consolidated profit at ₹1,795.96 crore compared to ₹1,481.76 crore in the last fiscal. The consolidated income from operations rose 6.6% to ₹17,838.26 crore in FY23 from ₹16,724.73 crore in the previous fiscal. The company witnessed healthy growth across core connectivity, digital platforms & services, and incubation services of data business, Tata Communications said in the BSE filing.  

For FY23, the consolidated EBITDA rose 2.2% YoY to ₹4,318 crore with margins at 24.2%, declining by 110 basis points YoY. For the March quarter, margin came in at 22.6%.

The committed capital expenditure (CAPEX) for the year was ₹1,689 crore as compared to ₹1,608 crore in FY22.

“I am pleased that we have met the company ambition of double-digit data growth for the past three consecutive quarters and for the full year,” said Amur S Lakshminarayanan, MD & CEO, Tata Communications.

“Our business results are proof that the ‘Fit to Grow’ strategy is now in motion from concept to action and its success is evident in the full year double-digit data revenue growth. We are now building the Company for a new growth trajectory enabled by our strong cash flow generation,” said Kabir Ahmed Shakir, Chief Financial Officer.