Tata Communications' Q3 Financials Show Mixed Results

Tata Communications, a leading telecom provider in the industry, recently declared its financial results for the quarter ended September 2023. According to MarketsMOJO, the stock call for Tata Communications is 'Sell'.

In the quarterly analysis, the company saw a 2.12% growth in net sales compared to 4.44% in the previous quarter. However, the consolidated net profit saw a decline of 42.19% in the same period. The operating profit (PBDIT) excluding other income also saw a slight decrease of 0.84%. On the other hand, interest expenses increased by 4.88%.

The operating profit margin (excluding other income) also saw a decline from the previous quarter. Overall, Tata Communications had a very negative financial performance in the quarter ended September 2023, with a score of -20 compared to -11 in the previous three months.

Despite this, there are some positive aspects to the company's financials. The operating cash flow has been consistently growing each year in the last three years, with the highest at Rs 4,384.35 crore. The net sales have also been growing each quarter in the last five quarters, with the highest at Rs 4,872.50 crore. This shows a positive trend in the company's sales.

However, there are also some areas of concern. The operating profit to interest ratio has been consistently falling in the last five quarters, indicating a deterioration in the company's ability to manage interest payments. The profit before tax (PBT) less other income has also seen a decline of 26.1% compared to the average of the previous four quarters. The same trend can be seen in the profit after tax (PAT), which has fallen by 43.6% compared to the average of the previous four quarters.

The operating profit and operating profit margin have also been consistently falling in the last five quarters, indicating a decline in the company's efficiency. The interest expenses have also been increasing, which signifies increased borrowings. The earnings per share (EPS) have also seen a decline in the last five quarters, showing a decrease in profitability for shareholders.

In terms of liquidity, the company's cash and cash equivalents have been consistently decreasing in the last six half-yearly periods. The debtors turnover ratio has also been decreasing in the last five half-yearly periods, indicating a slower pace in settling debts.

Overall, Tata Communications has seen a mix of positive and negative trends in its financial performance for the quarter ended September 2023. Investors should carefully analyze these factors before making any investment decisions.