Tata Communications Limited (TATACOMM) AI Stock Analysis

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Tata Communications Limited

(NSE:TATACOMM)

Select Model

Rating:56Neutral

Price Target:INR 1,709.00▼(-2.16% Downside)

Action:reiterated

Date:10/15/26

The score is held back mainly by weaker recent financial quality (margin compression, high leverage, and uneven free-cash-flow conversion) and a technically weak price trend. A high P/E with only a modest dividend yield further limits the valuation component. Offsetting these, the latest earnings call was constructive with guidance for double-digit EBITDA growth, better cash generation, and improving digital profitability, supporting a mid-range overall score.

Positive Factors

Steady revenue growth and diversified recurring order bookMulti-year revenue growth and a diversified order book support greater visibility than reliance on isolated contracts. The higher recurring, network, and higher-profitability mix can strengthen future revenue quality and provide a durable base for continued enterprise connectivity expansion.

Negative Factors

Material margin compression and weaker earnings qualityThe sharp decline in gross and net margins indicates that revenue growth has not translated proportionately into bottom-line earnings. Persistently lower margins would reduce reinvestment capacity and make future profitability more dependent on operating improvements that are not yet fully established.

Tata Communications Limited (TATACOMM) vs. iShares MSCI India ETF (INDA)

Market Cap: INR 469.22B
Dividend Yield: 1.00%
Average Volume (3M): 36.11K
Price to Earnings (P/E): 45.1
Beta (1Y): 0.89
Revenue Growth: 9.08%
EPS Growth: -20.04%
Country: India
Employees: 6,046
Sector: General
Sector Strength: 55
Industry: Telecommunications Services

Tata Communications Limited Business Overview & Revenue Model

Company Description

Headquartered in Mumbai, India, Tata Communications Limited, established in 1986 (and previously known as Videsh Sanchar Nigam Limited until its rebranding in 2008), delivers a comprehensive suite of telecommunications services across the globe. The...

How the Company Makes Money

Tata Communications primarily makes money by selling connectivity and managed digital infrastructure services to business and institutional customers under recurring contracts and usage-based arrangements. Key revenue streams typically include: (1) D...

Tata Communications Limited Earnings Call Summary

Earnings Call Date:Oct 15, 2026(Q2-2027)|% Change Since:5.29%|Next Earnings Date:Jan 20, 2027

Earnings Call SentimentPositive

The call was strongly positive, supported by 9.6% consolidated revenue growth, 21.2% EBITDA growth, 86% PAT growth, improved free cash flow, higher ROCE, robust double-digit order-book growth, improving digital margins, and multiple AI and connectivity wins. Management also expressed confidence in continued profitable growth, network demand, cloud expansion, and the unified AI stack. The main negatives were the foreign-exchange impact on normalized data growth, the digital portfolio's still-negative EBITDA margin, softness and event cancellations in media, relatively muted cloud growth, and the unresolved Canada tax settlement.

Positive Updates

Full Leadership Team in Place

Management stated that the full team is now in place, including Narottam Sharma as Chief Transformation Officer to lead the enterprise-wide transformation agenda.

Negative Updates

Foreign-Exchange Impact on Data Revenue

Management said reported top-line results were affected by a strengthening dollar. On a normalized basis, data revenue growth was about 6% year-over-year versus reported growth of 12.2%.

Company Guidance

Management said it will focus on profitable growth and “double-digit EBITDA growth this year,” with a commitment to turn the digital portfolio “to EBITDA positive at the soonest” and make the whole digital business EBITDA positive “as soon as possible,” while it expects the core connectivity margin achieved in Q2 to be achievable “in the coming quarters.” It said to “let us wait one more quarter” for constant-currency data growth, after which investors will “definitely see” the network growth in the order book convert to revenue, and said there should be “more better quarters in the future.” Management projected 70 petabytes of traffic needed by 2036 versus “about two or three right now,” said “60% of the future infrastructure is going to go towards inferencing,” and noted that media has “a big Olympics coming up next year.”

Tata Communications Limited Financial Statement Overview

Summary

Revenue has grown over the last five annual periods, but 2026 shows a meaningful profitability step-down (net margin down to 4.2% and gross margin down to 22.9%). Leverage remains a key constraint (debt-to-equity 3.6x; total debt 122.5B) despite improved equity. Operating cash flow improved in 2026, but free-cash-flow conversion has been modest and volatile in recent years.

Income Statement

66Positive

Balance Sheet

48Neutral

Cash Flow

55Neutral

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	260.14B	248.03B	231.09B	207.85B	178.38B	167.25B
Gross Profit	79.17B	56.75B	67.67B	64.09B	61.12B	58.13B
EBITDA	53.24B	50.59B	46.05B	43.90B	43.18B	42.27B
Net Income	11.04B	10.44B	18.36B	9.68B	17.96B	14.82B
Balance Sheet
Total Assets	290.11B	284.04B	265.85B	245.61B	205.53B	196.68B
Cash, Cash Equivalents and Short-Term Investments	6.58B	9.91B	15.03B	9.36B	17.69B	11.74B
Total Debt	133.69B	122.49B	123.57B	112.63B	85.77B	91.22B
Total Liabilities	254.12B	247.53B	235.60B	227.71B	190.04B	187.12B
Stockholders Equity	34.01B	34.47B	30.21B	17.86B	15.18B	9.28B
Cash Flow
Free Cash Flow	0	15.62B	7.05B	11.00B	28.91B	25.47B
Operating Cash Flow	0	39.95B	29.11B	31.82B	43.84B	42.04B
Investing Cash Flow	0	-15.24B	-21.79B	-26.44B	-18.42B	-8.95B
Financing Cash Flow	0	-24.39B	-9.36B	-8.13B	-22.41B	-34.31B

Tata Communications Limited Technical Analysis

Technical Analysis SentimentPositive

Last Price1746.70

Price Trends

50DMA1710.98Positive

100DMA1762.84Negative

200DMA1687.13Positive

Market Momentum

MACD7.54Negative

RSI55.20Neutral

STOCH52.57Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TATACOMM, the sentiment is Positive. The current price of 1746.70 is above the 20-day moving average (MA) of 1709.88, above the 50-day MA of 1710.98, and above the 200-day MA of 1687.13, indicating a bullish trend. The MACD of 7.54 indicates Negative momentum. The RSI at 55.20 is Neutral, neither overbought nor oversold. The STOCH value of 52.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:TATACOMM.

Tata Communications Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

IN:TATACOMM against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IN:INDUSTOWER	74Outperform	INR 1.01T	14.75	―	3.50%	5.31%	-24.06%
IN:BHARTIARTL	70Outperform	INR 12.88T	41.32	―	1.14%	17.56%	-20.64%
IN:ROUTE	67Neutral	INR 28.46B	5.98	―	2.85%	0.89%	104.13%
IN:RAILTEL	63Neutral	INR 79.80B	24.48	―	1.26%	22.56%	5.56%
IN:TATACOMM	56Neutral	INR 485.20B	45.10	―	1.00%	9.08%	-20.04%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
IN:IDEA	55Neutral	INR 1.37T	4.49	―	―	3.30%	―

* General Sector Average

Performance Comparison

IN:TATACOMM and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
IN:TATACOMM	Tata Communications Limited	1746.70	-110.60	-5.96%
IN:BHARTIARTL	Bharti Airtel Limited	2107.00	34.38	1.66%
IN:IDEA	Vodafone Idea Ltd	12.86	1.92	17.55%
IN:INDUSTOWER	Indus Towers Limited	400.00	2.12	0.53%
IN:RAILTEL	RailTel Corp. of India Ltd.	258.00	-95.65	-27.05%
IN:ROUTE	Route Mobile, Ltd.	454.75	-219.80	-32.58%

Tata Communications Limited Corporate Events

Tata Communications Posts Investor Presentation Ahead of Quarterly Earnings Call

Jul 22, 2026

Tata Communications has notified the stock exchanges that its investor presentation for the quarterly earnings call is now available on the company’s website. The move complies with SEBI’s disclosure regulations and provides shareholders and analysts...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 15, 2026

Tata Communications Limited AI Stock Analysis