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The company in an exchange filing on Tuesday, December 24, said that the Board has approved the proposal of reduction in employee cost by offering VRS. Those aged 45 and above could opt for voluntary retirement and this has been done to make organisation lean, the filing said.
Shares of MTNL reacted positively on the news by adding 2.2% to end the session at ₹52.47 on the NSE. Since the beginning of 2024, the stock of telecom provider has rallied as much as 56%, outpacing the broader market in a huge variance. The Nifty Midcap and Nifty SmallCap gained 24% each during the same period.
Interestingly, the company has been deploying nearly 80% of the topline to serve its employee costs. In FY24, the employee cost accounted for 78% of the company’s revenue, which stood ₹570 crore. The overhead expense had even outdone revenues between FY18 to FY20.
The government-owned telco, which earlier had a monopoly on fixed-line connections in Delhi and Mumbai has a headcount of 3309 at the end of March 2024. That compares with a total staff strength of 64,623 recorded in FY96 and about 36,500 in FY14.
However, it’s to be noted that at the time of formation of MTNL in April 1986, all employees of DoT were transferred to the company, resulting in an increased manpower.
The reduction in headcount is also in line with the company’s financial performance. MTNL’s revenue and operating profit have been weakening over several years and it has consequently defaulted in the repayment of its debts and liabilities. The company has been reporting losses every year since FY09, except FY14 in which it reported a net profit of ₹7825 crore.
As of March 2024, the total debt of MTNL stood at ₹30,028 crore, which is 41 times of its annual revenue of ₹728 crore. Further, the net loss of the company widened to ₹3302 crore in FY24 from ₹2911 crore reported in FY23.
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(Edited by : Anand Singha)
First Published: Dec 24, 2024 6:53 PM IST
