Tata Communucations
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Tata Communications is strategically pivoting towards profitable growth, emphasizing the monetization of its subsea cables and cloud-orchestration assets. Management's focus on contribution margins over top-line growth is expected to enhance revenue stability, particularly as the core connectivity business experiences its strongest growth in a decade. Despite challenges such as supply chain bottlenecks and execution delays, the company aims for double-digit EBITDA growth in FY27, supported by a robust pipeline in data center connectivity and scaling digital services. Vista's financial outlook reflects this optimism, projecting stable revenue growth and margins, with a fair valuation aligned with intrinsic value. The expected upside of over 30% underscores the potential for capital discipline and successful execution of strategic initiatives. Industry trends, including rising data consumption and improving pricing power, further bolster Tata's position. However, watchpoints include operational challenges from inflation and geopolitical tensions that could impact margins. Over the next 12-24 months, key opportunities lie in the digital portfolio's maturation and the monetization of strategic assets, while headwinds include potential delays in project execution and rising operational costs
Why We Like This Stock
- Management's shift towards contribution margins is expected to enhance profitability and revenue stability
- Strong demand in the core connectivity business and a robust pipeline in data center connectivity support growth projections
- Improving pricing power in the telecom industry aligns with Tata's strategic initiatives, enhancing long-term profitability
Things To Watch Out For
- Supply chain bottlenecks and execution delays pose risks to operational efficiency and project timelines
- Inflationary pressures and rising fuel costs could impact margins and overall profitability
- Geopolitical tensions may affect network continuity and operational stability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 20,969 | 23,109 | 24,803 | 25,723 | 27,288 |
| Profit Before Tax (Cr.) | 1,389 | 1,373 | 1,536 | 1,562 | 1,776 |
| PBT Margin | 6.6% | 5.9% | 6.2% | 6.1% | 6.5% |
| Net Profit (Cr.) | 691 | 1,203 | 914 | 1,172 | 1,325 |
| Earnings Per Share | 24.2 | 42.2 | 32.3 | 40.9 | 46.5 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Macguire | ▲ Buy | 2,200 | 27-Jul-2026 |
| ICICI Securities | ▲ Buy | 2,100 | 23-Jul-2026 |
| CLSA | ▲ Buy | 2,600 | 17-Jun-2026 |
| Geojit Financials | ► Add | 1,860 | 20-May-2026 |
| Kotak Securities | ▼ Sell | 1,450 | 23-Apr-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.