Tata Communications Limited (TATACOMM) AI Stock Analysis

• Market Cap: ₹427.03B
• Dividend Yield: 1.39%
• Average Volume (3M): 37.38K
• Price to Earnings (P/E): 35.6
• Beta (1Y): 1.21
• Revenue Growth: 4.94%
• EPS Growth: 49.05%
• Country: IN
• Employees: 7,144
• Sector: Services
• Sector Strength: N/A
• Industry: Telecommunications Services
• EPS (TTM): 12.80
• Shares Outstanding: 285,000,000
• 10 Day Avg. Volume: 11,946
• 30 Day Avg. Volume: 37,379
• PEG Ratio: 0.55
• Price to Book (P/B): 14.90
• Price to Sales (P/S): 1.95
• P/FCF Ratio: 63.83
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 44.33
• Revenue Forecast (FY): ₹246.44B

• Rating: 67 Neutral
• Price Target: ₹1,623.00 ▼(-10.04% Downside)
• Action: Reiterated Date: 10/11/25
• Date: Action: Reiterated 10/11/25

The overall stock score is primarily driven by strong financial performance, with robust revenue and profit growth. However, high leverage and an overbought technical position present risks. The valuation indicates the stock is relatively expensive, which could limit upside potential.

Positive Factors

Recurring, diversified revenue streams

A business model built on long-term, recurring contracts across connectivity, carrier wholesale, managed services and collaboration creates durable revenue visibility and customer stickiness. This supports predictable cash flow, facilitates multi-year planning, and enables upsell of higher‑margin managed offerings.

Strong operating margins and efficiency

Sustained strong gross and operating margins point to efficient network operations and cost control, allowing the company to retain more value from revenue. Margin resilience improves ability to reinvest in infrastructure, absorb pricing pressure in wholesale markets, and maintain profitability through cycles.

Solid operating cash generation

Consistently strong operating cash flow signals high quality earnings and funds core capex and network expansion without relying solely on financing. Positive OCF supports servicing debt and funding strategic investments, providing a durable source of liquidity for growth initiatives.

Negative Factors

High leverage and low equity ratio

Elevated leverage reduces financial flexibility, increases interest expense sensitivity, and raises refinancing risk during adverse conditions. A low equity ratio constrains balance sheet capacity for large investments or acquisitions and makes capital structure more vulnerable to earnings shocks.

Declining free cash flow

A drop in free cash flow, even from a positive base, limits excess funds available for debt repayment, shareholder returns or incremental strategic investments. If the decline persists it could pressure liquidity management and force tougher capital allocation choices over months.

Net profit margin volatility

Volatile net margins reduce earnings predictability and complicate forecasting and capital planning. This variability may reflect pricing pressure in wholesale segments or episodic items, making sustained improvement in return metrics and investor visibility more challenging.

Tata Communications Limited Business Overview & Revenue Model

Company Description

Tata Communications Limited provides telecommunications services worldwide. The company operates through Voice Solutions, Data and Managed Services, Payment Solutions, Transformation Services, and Real Estate segments. It provides voice and data transmission services; internet connectivity services; and other value-added services, such as unified conferencing and collaboration, managed hosting, mobile global roaming and signaling, transponder lease, and television up-linking, and other managed services, as well as sells and leases bandwidth on undersea cable systems. The company also offers end-to-end automated teller machines deployment, POS enablement, financial inclusion, card issuance and related managed services, and switching services to banking sector; cyber security; data center colocation services; and network management and support services. In addition, it provides networking services, including WAN ethernet, global VPN, and private lines; Internet of Things, smartphone proliferation, and tighter supply chain integration/automation; and network security, cloud security operations centers, cloud security, and custom solutions. Further, the company offers cloud, hosting, security, and SD-WAN; intelligent routing and on-demand connectivity solutions; media and entertainment services, including gaming, sports, news, cable, broadcasting, asset management, workflow management, channel origination, video contribution and distribution feeds, OTT platform as a service, live OTT delivery, and transcoding as services; and leases premises. It serves service providers and enterprises. 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.

How the Company Makes Money

Tata Communications makes money primarily by selling communications and digital infrastructure services under long-term and recurring commercial contracts to enterprise customers and other carriers/service providers. Key revenue streams typically include: (1) Connectivity and network services—fees for private network connectivity, IP transit/internet connectivity, and managed WAN/SD-WAN-style solutions delivered over its global backbone and last-mile access arrangements; (2) Carrier and wholesale voice/data services—charges to telecom carriers and service providers for international voice termination, data transport, and related wholesale services; (3) Managed and value-added services—recurring charges for managed network services, security offerings, and cloud/edge-related enablement, where Tata Communications operates and monitors customer environments and earns managed service fees; and (4) Collaboration and communications solutions—subscription and usage-based fees for enterprise communications, conferencing, and related platforms/solutions. Revenue is influenced by factors such as customer contract volume/tenure, global bandwidth demand, pricing dynamics in wholesale markets, and the company’s ability to bundle higher-margin managed services with core connectivity. Information on specific significant partnerships or customer-specific arrangements is null.

Tata Communications Limited Financial Statement Overview

Summary

Tata Communications demonstrates notable strengths in revenue and profit growth, supported by strong operating efficiencies. However, financial stability is partially compromised by high leverage, posing potential risks. Cash flows are robust, albeit with a recent decline in free cash flow.

Income Statement

Tata Communications has shown consistent revenue growth, with a notable increase from 2024 to 2025. Gross profit margins are strong, indicating effective cost management. The EBIT and EBITDA margins are also healthy, showing robust operational efficiency. However, the net profit margin has seen some fluctuations, suggesting potential volatility in net income.

Balance Sheet

The company's debt-to-equity ratio is relatively high, indicating significant leverage which poses financial risk. Return on equity has improved over the years, reflecting enhanced profitability relative to shareholders' equity. The equity ratio is somewhat low, suggesting that assets are largely financed by debt rather than equity, which may affect financial stability.

Cash Flow

Operating cash flow remains strong, demonstrating the company's ability to generate cash from operations. However, free cash flow has decreased in the latest year, though it remains positive. The ratio of operating cash flow to net income is favorable, indicating efficient cash generation relative to net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	238.48B	231.09B	207.85B	178.38B	167.25B	171.00B
Gross Profit	60.15B	67.67B	64.09B	61.12B	58.13B	59.10B
EBITDA	41.26B	40.43B	38.91B	38.71B	37.68B	37.74B
Net Income	16.49B	18.36B	9.68B	17.96B	14.82B	12.51B
Balance Sheet
Total Assets	272.04B	265.85B	245.61B	205.53B	196.68B	213.33B
Cash, Cash Equivalents and Short-Term Investments	4.57B	15.03B	9.36B	17.69B	11.74B	22.08B
Total Debt	133.31B	123.57B	112.63B	85.77B	91.22B	113.94B
Total Liabilities	243.53B	235.60B	227.71B	190.04B	187.12B	211.90B
Stockholders Equity	28.48B	30.21B	17.86B	15.18B	9.28B	1.15B
Cash Flow
Free Cash Flow	-1.86B	7.05B	11.00B	28.91B	25.47B	18.16B
Operating Cash Flow	9.54B	29.11B	31.82B	43.84B	42.04B	31.80B
Investing Cash Flow	-5.21B	-21.79B	-26.44B	-18.42B	-8.95B	-20.05B
Financing Cash Flow	-6.99B	-9.36B	-8.13B	-22.41B	-34.31B	-12.05B

Tata Communications Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1804.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TATACOMM, the sentiment is Negative. The current price of 1804.2 is above the 20-day moving average (MA) of 1538.70, above the 50-day MA of 1609.23, and above the 200-day MA of 1707.47, indicating a bearish trend. The MACD of -53.86 indicates Positive momentum. The RSI at 44.75 is Neutral, neither overbought nor oversold. The STOCH value of 55.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:TATACOMM.

Tata Communications Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INDIAMART	76 Outperform	₹125.92B	17.72	―	1.33%	13.36%	24.85%
MPSLTD	73 Outperform	₹26.35B	24.27	―	4.14%	16.76%	50.15%
IEX	72 Outperform	₹109.68B	25.04	―	3.23%	14.10%	19.23%
TATACOMM	67 Neutral	₹427.03B	35.60	―	1.39%	4.94%	49.05%
RAILTEL	66 Neutral	₹90.54B	47.77	―	0.79%	29.92%	22.87%
FSL	62 Neutral	₹158.84B	48.02	―	1.13%	25.92%	24.58%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%

Tata Communications Limited Corporate Events

Tata Communications CFO Kabir Ahmed Shakir Resigns; Successor Search Underway

Tata Communications has announced that its Chief Financial Officer, Kabir Ahmed Shakir, has tendered his resignation, with his final date of cessation to be decided and announced later. The company has begun the process of identifying a successor and has indicated that further disclosures will be made in due course to ensure a smooth transition, a move that will be closely watched by investors given the central role of the CFO in financial strategy and governance.