Tata Communications shares: Brokerages retain 'Buy' despite Q1 earnings miss; check revised target prices
Nuvama Institutional Equities noted that TCOM's adjusted EBITDA margin stood at 19.4 per cent (flat QoQ), slightly below its estimates, while adjusted PAT of Rs 240 crore also came in below expectations.
- Jul 23, 2026,
- Updated Jul 23, 2026 10:03 AM IST
Select domestic brokerages have maintained their 'Buy' ratings on Tata Communications Ltd shares, even as the company's June-quarter earnings came in below expectations. "Tata Communications (TCOM) reported consolidated revenue of Rs 6,580 crore (up 10.5 per cent YoY) for Q1 FY27, slightly lower than JMFe/consensus, due to weak growth in cloud & cyber-security and media segments in the digital portfolio. Data segment revenue was 1.8 per cent lower than JMFe at Rs 5,710 crore as digital portfolio revenue was 2.9 per cent lower than JMFe at Rs 2,940 crore and core connectivity revenue was also 0.7 per cent lower at Rs 2,770 crore," JM Financial stated.
"Further, reported EBITDA, at Rs 1,230 crore (up 8.2 per cent YoY), was 6–7 per cent lower than JMFe/consensus while normalised EBITDA was higher at Rs 1,280 crore in Q1 FY27 (up 12.7 per cent YoY), still 2–3 per cent below JMFe/consensus (normalised EBITDA margin at 19.4 per cent in Q1 FY27 with Data EBITDA margin at 17.7 per cent and digital portfolio EBITDA margin at negative 6.9 per cent)," it added.
"Net debt rose QoQ to Rs 10,400 crore while capex rose QoQ to Rs 660 crore or 10 per cent of revenue in Q1. We have cut our FY27–29 revenue/EBITDA/PAT estimates by 1–4 per cent, factoring in the Q1 results," the brokerage also said.
Picturing this, JM reduced its target price to Rs 2,260 from Rs 2,295 earlier, while retaining the 'Buy' call. "We reiterate BUY on TCOM (with a revised TP of Rs 2,260 based on 10.5x Sep'28 EV/EBITDA multiple for the data segment) as we expect data segment EBITDA to grow at a robust CAGR of ~20 per cent over FY26–29E, driven by strong growth in digital portfolio and improvement in overall EBITDA margin from current ~20 per cent to ~22 per cent by FY29 (management guidance of 23–25 per cent)," it further stated.
Meanwhile, Nuvama Institutional Equities noted that TCOM's adjusted EBITDA margin stood at 19.4 per cent (flat QoQ), slightly below its estimates, while adjusted PAT of Rs 240 crore also came in below expectations.
Although it underlined that the company reported decent Q1 FY27 results with revenue at Rs 6,580 crore (+0.4 per cent QoQ, +10.5 per cent YoY), in line with Nuvama's estimate.
"Data revenue grew 11.3 per cent YoY driven by solid 17.1 per cent YoY growth in Digital business," it also said. With this, Nuvama reiterated 'Buy' and raised its target price.
"TCOM Digital business is catching up on the growth front, but a lot still needs to be done on the margin front. New management is focusing on improving profitability while targeting double-digit EBITDA growth in FY27. We tweak FY27E/28E EBITDA by -5 per cent/-0.1 per cent — sharp cut in FY27 PAT is due to lower other income. Maintain 'BUY' with a TP of Rs 2,300 (earlier Rs 2,000)," it stated.
Meanwhile, TCOM shares were last seen trading 0.57 per cent higher at Rs 1,770.70 in Thursday's early trade.
Select domestic brokerages have maintained their 'Buy' ratings on Tata Communications Ltd shares, even as the company's June-quarter earnings came in below expectations. "Tata Communications (TCOM) reported consolidated revenue of Rs 6,580 crore (up 10.5 per cent YoY) for Q1 FY27, slightly lower than JMFe/consensus, due to weak growth in cloud & cyber-security and media segments in the digital portfolio. Data segment revenue was 1.8 per cent lower than JMFe at Rs 5,710 crore as digital portfolio revenue was 2.9 per cent lower than JMFe at Rs 2,940 crore and core connectivity revenue was also 0.7 per cent lower at Rs 2,770 crore," JM Financial stated.
"Further, reported EBITDA, at Rs 1,230 crore (up 8.2 per cent YoY), was 6–7 per cent lower than JMFe/consensus while normalised EBITDA was higher at Rs 1,280 crore in Q1 FY27 (up 12.7 per cent YoY), still 2–3 per cent below JMFe/consensus (normalised EBITDA margin at 19.4 per cent in Q1 FY27 with Data EBITDA margin at 17.7 per cent and digital portfolio EBITDA margin at negative 6.9 per cent)," it added.
"Net debt rose QoQ to Rs 10,400 crore while capex rose QoQ to Rs 660 crore or 10 per cent of revenue in Q1. We have cut our FY27–29 revenue/EBITDA/PAT estimates by 1–4 per cent, factoring in the Q1 results," the brokerage also said.
Picturing this, JM reduced its target price to Rs 2,260 from Rs 2,295 earlier, while retaining the 'Buy' call. "We reiterate BUY on TCOM (with a revised TP of Rs 2,260 based on 10.5x Sep'28 EV/EBITDA multiple for the data segment) as we expect data segment EBITDA to grow at a robust CAGR of ~20 per cent over FY26–29E, driven by strong growth in digital portfolio and improvement in overall EBITDA margin from current ~20 per cent to ~22 per cent by FY29 (management guidance of 23–25 per cent)," it further stated.
Meanwhile, Nuvama Institutional Equities noted that TCOM's adjusted EBITDA margin stood at 19.4 per cent (flat QoQ), slightly below its estimates, while adjusted PAT of Rs 240 crore also came in below expectations.
Although it underlined that the company reported decent Q1 FY27 results with revenue at Rs 6,580 crore (+0.4 per cent QoQ, +10.5 per cent YoY), in line with Nuvama's estimate.
"Data revenue grew 11.3 per cent YoY driven by solid 17.1 per cent YoY growth in Digital business," it also said. With this, Nuvama reiterated 'Buy' and raised its target price.
"TCOM Digital business is catching up on the growth front, but a lot still needs to be done on the margin front. New management is focusing on improving profitability while targeting double-digit EBITDA growth in FY27. We tweak FY27E/28E EBITDA by -5 per cent/-0.1 per cent — sharp cut in FY27 PAT is due to lower other income. Maintain 'BUY' with a TP of Rs 2,300 (earlier Rs 2,000)," it stated.
Meanwhile, TCOM shares were last seen trading 0.57 per cent higher at Rs 1,770.70 in Thursday's early trade.