Tata Communications shares hit upper circuit after Q2 profit surges 7-fold to Rs 385 crore

Tata Communications share price hit 5 percent upper circuit on October 19 after the company declared its September quarter results.

The company on October 16 posted an around seven-fold jump in consolidated net profit at Rs 384.81 crore for the September quarter. The company had registered a profit of Rs 54.31 crore in the corresponding period of the preceding fiscal.

Consolidated revenue grew 4.5 percent to Rs 4,477.18 crore during the reported quarter from Rs 4,282.3 crore in the year-ago period, it said in a BSE filing. Besides, the company concluded the sale of a land parcel along with building for a total consideration of Rs 67.41 crore.

The stock was trading at Rs 921.45, up Rs 43.85, or 5.00 percent at 09:30 hours. It has touched an intraday high of Rs 921.45 and an intraday low of Rs 921.45.

The scrip touched upper circuit of Rs 921.45 per share. There were pending buy orders of 37,286 shares, with no sellers available.

"The company believes that it will be able to defend its position and also has obtained a legal opinion in this regard. Accordingly, the company has assessed the balance demand of Rs 119973 lakhs as part of contingent liability," the filing said. The company made a provision of Rs 11.8 crore and Rs 22.29 crore towards interest on the unpaid provisions for the quarter and half year ended September 30, 2020.

"Data business continues to grow at a healthy pace and profitability has improved due to our focus on operational efficiencies. Our margins have expanded, and we have witnessed 3 successive quarters of double-digit Ebitda growth leading to strong profit after tax. There has been a robust improvement across all financial parameters," its Chief Financial Officer Pratibha K Advani said in a statement. Shares of Tata Communications closed at Rs 877.6 apiece, up 4.8 percent.

According to Moneycontrol SWOT Analysis powered by Trendlyne, the stock is showing strong momentum: Price above short, medium and long term moving averages. FII / FPI or Institutions are increasing their shareholding.

Moneycontrol technical rating is very bullish with moving averages and technical indicators being bullish.