Tata Communications shares jumped 3% after JM Financial initiated coverage on the stock with a “buy” rating and a price target of ₹2,030. As of 11:10 AM, the shares were trading 3.10% higher at Rs 1,552.90.
The brokerage values the company’s data segment at 11x FY27 EV/EBITDA, slightly above its historical average of 10.2x, reflecting optimism about its growth potential.
JM Financial expects the data segment’s EBITDA to expand at a robust 21% CAGR between FY24 and FY28. The company’s growing digital portfolio is seen as a key driver of long-term expansion. While Tata Communications’ FY27 targets could be met through inorganic growth, achieving them organically may extend to FY28 due to prevailing global macro uncertainties.
Despite the strong growth outlook, certain risks persist. As per JM Financial, weak global economic conditions, delayed discretionary spending, and any adverse ruling on adjusted gross revenue (AGR) could impact performance. However, analysts remain confident that Tata Communications’ strategic digital expansion will sustain its upward momentum.
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