Tata Communications shares were in focus after global brokerage CLSA maintained its Outperform rating on the stock, with a target price of ₹2,100, implying an upside potential of around 8% from the current market price of ₹1,938.00. The brokerage highlighted the company’s stable Q2FY26 performance, steady growth in digital services, and comfortable leverage position.
In the September quarter, Tata Communications reported consolidated revenue of ₹6,100 crore, up 6% year-on-year and 2% sequentially, broadly in line with estimates. The company’s data business revenue rose 7% YoY and 1% QoQ, led by continued momentum in its digital services segment, which now accounts for 49% of total data revenue. The digital services vertical recorded a 14% YoY and 1% QoQ increase, reflecting sustained demand across cloud, security, and managed connectivity offerings.
The company’s consolidated EBITDA came in at ₹1,170 crore, up 4% YoY and 3% QoQ, while the data business EBITDA rose 10% YoY and 9% QoQ, supported by a 144-basis-point sequential improvement in data margins.
CLSA noted that Tata Communications’ gearing remains comfortable, with net debt-to-EBITDA at 2.5x, indicating a healthy balance sheet position. The brokerage expects the company to deliver 10–15% compound annual growth (CAGR) in data revenue and consolidated EBITDA through FY28, driven by the expansion of digital infrastructure and managed services.
The firm added that the company’s ongoing digital transformation focus and diversified service portfolio position it well for sustained growth in enterprise connectivity and cloud-based solutions.
Disclaimer: This article is for informational purposes only and not a recommendation to buy or sell any securities. Brokerage views are based on their respective research reports and publicly available information.