On Friday, shares of Tata Communications Ltd was locked in upper circuit of 5 percent at Rs 759.75 in the morning session before paring gains.
The surge comes after the Tata Group company reported a 236 percent surge in profit after tax at Rs 258 crore for the June ended quarter from Rs 77 crore a year ago. The massive rise in profit was driven by strong growth in its data business.
The telco's consolidated revenue rose 5.6 percent year-on-year to Rs 4,403 crore in the April-June quarter. Revenue from data business was up by 10 percent from a year ago to Rs 3,604 crore due to robust performance across all segments despite the uncertain economic environment.
The nationwide lockdown and the ensuing remote working led to an increase in bandwidth usage and higher collaboration traffic, the company said in a statement.
"Enterprises have upgraded their capacities and are consuming more data to support this work model. Consequently, our India enterprise business grew 6.7% y-o-y and international enterprise business grew 8.3% y-o-y on the back of strong demand. This has led to increase in both revenue and profitability," the Tata Communications added.
The company's consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) was Rs 1,042 crore for the June-ended quarter, up 26.2 percent from a year ago.
"We have started this new financial year with strong performance amidst an uncertain and unpredictable economic environment. We remain focused on our strategy to deliver profitable growth and to be a preferred digital partner to our customers," said AS Lakshminarayanan, managing director and chief executive at Tata Communications.