Shares of Tata Communications fell on Friday after the firm delivered its first-quarter results for the financial year 2025. 

What Happened: The firm reported a consolidated net profit of ₹332.84 crore for the June quarter, marking a 12% decrease from the ₹382 crore reported in the same quarter last year. Revenue increased 18% year on year to ₹5,633 crore.

Brokerage View: Motilal Oswal maintained a "neutral" rating for Tata Communications. The company revenue declined 1% on a quarterly basis due to a decline in voice, core connectivity and other segments.

The brokerage noted that this was in line with its expectations. Data revenue, representing 82% of consolidated revenue, increased by 0.8% quarter on quarter to ₹4694 crore, meeting expectations, it added.

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Consolidated EBITDA rose 6% sequentially to ₹1,124 crore, aligning with the brokerage’s expectations, driven by synergies from mergers and acquisitions, a review of subsidiaries and the termination of unprofitable contracts, it said. The consolidated EBITDA margin increased by 140 basis points to 20%, quarter on quarter. Motilal Oswal expects the firm's long-term margin target to remain between 23% and 25%.

The brokerage also remained positive about the Tata Group firm's decision to move Tata Communications (UK) Limited (TC UK) directly under the ownership of Tata Communications.

"This would be an intra-group transaction and therefore, the ultimate beneficial economic interest and ownership of the company in TC UK will remain the same," it said.

Price Action: Tata Communications was trading 1.61% lower at ₹1,840.35 on Friday.

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