Q4 results: Tata Communications performance yet to match estimates

Street will await consistent improvement in margins to re-rate stock

Tata Communications failed to live up to analysts’ expectations, missing their estimates and its guidance by a wide margin on the back of a muted March quarter performance. Revenues were down 2.4 per cent, sequentially, to Rs 41 billion largely because of a 14 per cent drop in voice revenues and flat data revenues. The data business accounts for about 72 per cent of its revenues, while voice and ATM businesses constitute the remaining 28 per cent. 

Of the segments that constitute the data business, the performance of growth services has been particularly disappointing. The company reported a $14 million