Tata Communications‘ share price shot up sharply on Thursday afternoon after the company posted its earnings for the quarter ended June.

What Happened: The Tata Group company’s consolidated net profit for the June quarter stood at ₹332.84 crore, down 12% from the ₹382 crore posted in the same quarter last year. The revenue from operations stood at ₹5,633 crore, up around 18% from the ₹4,771 crore posted in the corresponding quarter of the previous year.

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Data revenue jumped by 20% year-on-year, coming in at ₹4,694 crore. EBITDA for the quarter stood at ₹1,124 crore, a 9.8% jump compared to the ₹1,024 core posted in the June quarter of the previous year. EBITDA margin on the other hand contracted 150 basis points to 20% from 21.5%.

“We remain bullish about the market opportunities, and with our expanded product capabilities and increasing customer relevance, we are confident in our ability to achieve our medium-term growth objectives,” said AS Lakshminarayanan, CEO, Tata Communications.

Shares of the company shot up sharply as soon as the announcement was made.

Tata Communications Limited has decided to invest in its step-down wholly-owned subsidiary, Tata Communications (UK) Limited (TC UK). The board has approved an investment of up to $26.8 million (around ₹223.84 crore). This investment will involve subscribing to 10.41 lakh new ordinary shares of TC UK at a fair market value of $25.7 per share.

Alongside this share subscription, TC UK will undergo restructuring steps to transition from being a step-down subsidiary to becoming a direct wholly owned subsidiary of Tata Communications.

Price Action: Tata Communications’ share price was up 1.05% to trade at ₹1,870.40 just before market close on Thursday.

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