Tata Group stock: This multibagger has lost steam in short term, here are fresh price targets

Shares of Tata Communications have lost their momentum in the last one year. The multibagger stock has logged stellar returns of 324% in five years and 457% in 10 years. However, the Tata Group stock saw profit-booking in the last six months, slipping 28% from its record high of Rs 2175 reached on October 3, 2024. The stock is down 10.15% in a year and fallen 12.16% in six months. 

With Tata Communications stock showing downward trend in the short term, here's a look at what brokerages say on the prospects of the Tata Group stock. 

Centrum Broking has a reduce call on the Tata Communications stock post Q4 earnings announced this week. It has revised its price target downwards to Rs 1618.  

"We expect it to have 22% EBITDA margin in the near term. We expect Revenue/EBITDA/PAT to clock 10.8%/19.8%/51.5% CAGR over FY25-FY27E. We have revised our FY26E/FY27E EPS by (10.3%)/(3.9%) and maintain our REDUCE rating with a revised target price of Rs 1,618 (vs Rs 1,713 earlier) at EV/EBITDA of 8.5x on March’27E," said the brokerage. 

JM Financial has reduced its price target downwards from Rs 2,030 on the Tata Group stock. 

"We maintain our BUY rating on TCOM (revised TP of Rs 2,000/share) based on 11x FY27 EV/EBITDA multiple for the data segment, (vs. 5-year historical average of 10.4x) as we expect data segment EBITDA to grow at a robust CAGR of 24% over FY25-28E," said the brokerage.  

On the order book, the brokerage said, "Further, the management indicated that order book growth normalised and funnel additions moderated QoQ in 4QFY25, but the overall funnel continues to be healthy across India and internationally." 

MOFSL has maintained its 'Neutral rating' on the stock as it awaits acceleration in data revenue along with margin expansion.

However, it raised Tata Communications' FY26-27 revenue estimates by 1-2 per cent. The brokerage said Tata Communications' ambition of doubling data revenue by FY27 remains a tall ask without further acquisitions. Overall, it is building in a 9 per cent data revenue CAGR over FY25-28, with data revenue reaching Rs 26,200 crore by FY28 against the ambition of Rs 28,000 crore by FY27.

"We ascribe 9x EV/Ebitda to TCOM’s data business and 5x EV/Ebitda to voice and other businesses. We ascribe an Rs 3,000 crore (or Rs 104 per share) valuation to TCOM’s 26 per cent stake in STT data centers. Our SoTP-based target price remains unchanged at Rs 1,660 as our Ebitda cut is offset by the roll forward of the valuation base to Jun’27 (from Mar’27 earlier)," MOFSL said.

The shares were trading on a flat note at Rs 1570.20 against the previous close of Rs 1584.25 on BSE. Total 5112 shares of the firm changed hands amounting to a turnover of Rs 80.57 lakh on BSE. Market cap of the Tata Group firm fell to Rs 45,005 crore. 

The Tata Group firm reported a 223.6% rise in net profit for the fourth quarter ending March 31, 2025. Profit rose to Rs 1,040.5 crore. Revenue from operations reported a 6.1% year-on-year increase, amounting to Rs 5,990.4 crore for Q4 FY2025. 

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.