This Tata Group stock tripled in three years; buy, sell or hold?

Shares of Tata Communications have delivered over 200% returns for shareholders in the last three years. The stock, which  closed at Rs 370.80   on April 17, 2020 was trading at Rs 1247 in the current session, clocking returns of 237% during the period. In comparison, Sensex rose 89% in three years.

The Tata Group stock has gained 45% from their 52-week low of Rs 856 hit on June 15 last year.

The stock was trading at Rs 1,248 today, down 1.38% against the previous close of Rs 1265.85 on BSE. The large cap stock has gained 3.61% in one year and risen 5.14% since the beginning of this year. 

Total 0.15 lakh shares of the firm changed hands amounting to a turnover of Rs 1.99 crore on BSE. The stock hit a 52-week high of Rs 1,429.95 on January 12, 2023. Market cap of the Tata Group firm fell to Rs 35,563 crore.

In terms of technicals, the relative strength index (RSI) of Tata Communications stock stand at 60.8, signaling it's trading neither in the overbought zone nor in the oversold zone. Tata Communications stock has a one-year beta of 0.9, indicating low volatility during the period. Tata Communications are trading higher than the 20 day, 50 day and 200 day moving averages but lower than 5 day and 100 day moving averages.      

Tata Communications reported a consolidated net profit of about Rs 394 crore for the December 2022 quarter, a tad lower than the year-ago period.  The Q3 FY23 net profit was 0.3 per cent lower than last year's figure of about Rs 395 crore (profit for the period attributable to equity holders of the parent).

Sales of the Tata Group firm climbed 8.21% to Rs 4528.34 crore in the December quarter against Rs 4184.89 crore in the corresponding quarter of the previous fiscal.            

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, “The stock has taken support near the significant 200DMA level of Rs 1160 and indicated a decent pullback to move past the important 50EMA level of Rs 1230 to improve the bias and sentiment anticipating for further upward move till Rs 1370-1400 zone. The RSI has shown a steady and decent pick up to strengthen the trend and has visibly much upside potential from here on. With the chart looking attractive, we suggest to buy the stock for an upside target of Rs 1400 keeping the stop loss of Rs 1220.”

Abhijeet from Tips2trades said, "Tata Communications currently looks bearish on the daily charts with strong resistance at Rs 1297. A fall till support of Rs 1215 looks likely."

Tata Communications is engaged in the business of providing international telecommunications services. The company’s segments include Voice Solutions (VS), Data and Managed Services (DMS) and Real Estate (RE). The VS segment includes international and national long distance voice services. The DMS segment includes corporate data transmission services, virtual private network signaling and roaming services, television, and other network and managed services. The RE segment includes lease rentals for premises given on lease and does not include premises held for capital appreciation.

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