Jan 21 (Reuters) – India’s Tata Communications reported its first profit rise in three quarters on Wednesday, on strong demand for its cloud services and connectivity solutions.
The company also picked Ganesh Lakshminarayanan as managing director and chief executive officer-designate. He will be appointed once regulatory approvals are in place.
Lakshminarayanan is managing director and group vice president for ServiceNow in India and the South Asian Association for Regional Cooperation (SAARC) region, the firm said in a statement.
The Mumbai-based Tata Communications, which offers data connections and cybersecurity to enterprises, said its profit jumped 54.3% on-year to 3.65 billion rupees ($39.8 million) for the three months ended December 31.
Revenue from its mainstay data services business jumped 9.4% to 53.8 billion rupees, boosting overall revenue 6.7% to 61.89 billion rupees.
Tata Communications aims to grow its data business revenue to 280 billion rupees by fiscal year 2028, driven by digital services that it expects will boost future revenue and margins.
It has been reducing its reliance on legacy network services, which continue to face pricing pressure and operational disruptions, while investing in digital infrastructure businesses such as cloud connectivity, cybersecurity, Internet of Things and communication platforms.
The firm also recorded a provision of 609.8 million rupees in the quarter after India notified new labour codes, the country’s biggest overhaul of workers’ laws in decades.
The codes require employee wages to be at least 50% of cost-to-company, and benefits like provident funds and gratuity to be determined based on wages.
Implemented in November, the new codes have dragged the profit of Indian big tech firms, including Wipro, TCS and HCLTech.
($1 = 91.6910 Indian rupees)
(Reporting by Aleef Jahan and Mridula Kumar in Bengaluru; Editing by Harikrishnan Nair)
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