Buy Tata Communications; target of Rs 1927: Geojit Financial Services

Geojit Financial Services research report on Tata Communications

Tata Communications operates in 190+ countries, serving 7,000+ clients, including 300+ Fortune 500 companies. It is a major global network services provider, offering software-defined networking solutions. In Q3FY25, Tata Communication Ltd revenue increased 3.8% YoY to Rs. 5,798cr, driven higher data-segment revenue. Data segment revenue grew 6.2% YoY to Rs. 4,903cr, aided by growth in core connectivity by 2.8% YoY to Rs. 2,590cr and digital portfolio by 10.2% YoY to Rs 2,313cr. Collaboration and Managed CPaaS rose 11.7% YoY to Rs. 1,177cr, aided by the launch of Kaleyra.Ai, which boosted enterprise customer adoption. Next Gen connectivity grew 9.2% to Rs. 248cr, supported by cloud adoption by customers, internet-based operations, and AI advancement. Cloud and Security fabric increased 12.5% YoY to Rs. 432cr, underpinned by the expansion of security portfolio. EBITDA increased 2.4% YoY to Rs. 1,181cr, driven by lower other expenses (-4% YoY) and employee benefits (-1.1% YoY). However, EBITDA margin declined 20bps YoY to 20.4%. Reported PAT expanded 424.0% YoY to Rs. 236cr, on higher topline.

Outlook

Therefore, we assign a Buy rating on the stock with a target price of Rs. 1,927, based on 23x FY27E adjusted EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Tata Communications - 04042025 - geo