Tata Communucations
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Tata Communications is navigating a strategic transformation under new leadership, emphasizing profitable growth through organizational restructuring and enhanced sales incentives. Management's confidence in achieving double-digit EBITDA growth for FY27 is supported by a robust pipeline in DC-to-DC connectivity and the scaling of digital services, despite current GPU availability challenges. Vista's financial outlook reflects stable revenue growth and margins, aligning with management's focus on capital discipline and network capacity investments. The anticipated monetization of the STT India stake and the execution of a customer-centric strategy present potential upside. However, the company faces headwinds from contract-related write-offs and weak cash conversion relative to its asset base. The telecom industry is expanding, driven by digitalization and improving pricing power, which bodes well for Tata Communications' competitive position. Over the next 12-24 months, key opportunities include the acceleration of high-margin network services and the growth of digital offerings, while watchpoints include the execution risks associated with the strategic pivot and ongoing operational challenges
Why We Like This Stock
- Management's confidence in achieving double-digit EBITDA growth for FY27 supports Vista's revenue outlook
- The robust pipeline in DC-to-DC connectivity and scaling of digital services are key growth drivers
- Potential upside from the monetization of the STT India stake enhances the company's financial flexibility
Things To Watch Out For
- Contract-related write-offs have impacted recent results, posing risks to short-term performance
- Weak cash conversion relative to the asset base may hinder operational efficiency
- Ongoing GPU availability challenges could affect the scaling of cloud operations
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 20,969 | 23,109 | 24,803 | 25,702 | 27,495 |
| Profit Before Tax (Cr.) | 1,389 | 1,373 | 1,536 | 1,596 | 1,851 |
| PBT Margin | 6.6% | 5.9% | 619.3% | 6.2% | 6.7% |
| Net Profit (Cr.) | 691 | 1,203 | 914 | 1,197 | 1,380 |
| Earnings Per Share | 24.2 | 42.2 | 32.3 | 41.8 | 48.4 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| CLSA | ▲ Buy | 2,600 | 17-Jun-2026 |
| Geojit Financials | ► Add | 1,860 | 20-May-2026 |
| ICICI Securities | ▲ Buy | 2,100 | 23-Jul-2026 |
| Kotak Securities | ▼ Sell | 1,450 | 23-Apr-2026 |
| Macguire | ▲ Buy | 2,200 | 27-Jul-2026 |
Company Overview
Show Company Profile
Tata Communications Limited operates as a communications technology company worldwide. It offers voice and data transmission services, internet connectivity services, and other value-added services, such as unified conferencing and collaboration services, managed hosting, mobile global roaming and signaling services, transponder lease, television uplinking and other managed services, data center colocation services, network management and support, and other related services. The company also provides IZO, a self-healing network for interconnection between data centre; IZO+, a multi cloud network; Vayu Cloud, an enterprise sovereign cloud platform, which integrates infrastructure, AI, data, and security; AI Studio, an end-to-end platform to discover, build, deploy, and scale AI workloads; and ThreadSpan, an AI-powered control platform for observability, automated configuration, and closed-loop automation. In addition, it offers TC, a single-pane-of-glass view and control in network, cloud, and cybersecurity environments; Kaleyra AI platforms for conversational AI, omnichannel engagement and hyper-personalized experiences; cybersecurity products, including managed detection and response, cloud security, advanced network security, security assessment and consulting services, OT security, SD-WAN, security service edge, hosted and managed SASE, and edge distribution platform. Further, the company provides move, an IoT product; TX Hub, an AI powered and no-code platform for customer and agent experience; and Kaleyra.ai, a CX platform for data, automation, and engagement. Additionally, it is involved in the sale and leasing of bandwidth on undersea cable systems; leasing, letting out, licensing, or developing immovable properties. The company was formerly known as Videsh Sanchar Nigam Limited and changed its name to Tata Communications Limited in 2008. Tata Communications Limited was incorporated in 1986 and is based in Mumbai, India.