The stock of Tata Communications has been on a declining trend for the past few years.

The company is still a top player in the voice and enterprise data carriage market, as it has a substantially large network connecting most continents and countries.

Despite these facts the company has had low rate of growth in revenues over the past few years. In the last couple of fiscals, revenues expanded by 8-11 per cent.

More importantly, Tata Communications continues to report losses at the net level.

The company has net-debt of Rs 7,252.9 crore as of September.

It has had to take recourse only to debt whenever funds were necessary as the company is not allowed to raise fresh equity, given that the Central Government is still a shareholder.

This means that interest costs could hurt in a high-interest rate environment.

However, Tata Communications' performance in the first half of FY12 has been encouraging with 13 per cent growth in revenues and a 44 per cent rise in operating profits.

Net losses too have been trimmed. The company's data carriage division is growing at a healthy clip.

Neotel, a South Africa-based player, where Tata Communications has a significant stake, too is delivering strong revenue growth. The other much awaited event is the sale of excess land.

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