Tata Communications: Ongoing supply-side headwinds to hurt near term

Original equipment manufacturer (OEM) lead time issues, which had worsened during the April-June quarter, rose four times as compared to the earlier 12-16 weeks.

The April-June quarter (Q1 of FY23) performance of Tata Communications (Tata Comm) was a mixed bag with operating profit margins better than estimates but revenues missed Street expectations.
 

The operating performance of the data segment continues to disappoint and it was reflected in the stock prices, which fell 1.8 per cent.
 

This comes even as the benchmarks and the broader indices were up over 0.5 per cent.
 

Overall revenues were marginally higher on a sequential basis at Rs 4,310 crore.
 

Growth was led by the voice segment whose revenues were up 4.5 per cent while data segment sales improved