Tata Communications shares jump 5% after Macquarie says stock may double in 3 years

Tata Communications share price

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26 Aug, 2025 12:21

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The shares of Tata Communications jumped nearly 5 percent on July 2 after Macquarie issued a bullish note for the stock. The shares of the Tata Group company were trading at Rs 1,811 apiece.

Macquarie initiated coverage on Tata Communications with an 'Outperform' rating and a target price of Rs 2,300 per share, CNBC-TV18 reported. This implies an upside potential of over 30 percent from the previous closing price.

According to the international brokerage firm, the shares of Tata Communications can potentially double over the next three years in a bullish case. It noted that the company is enabling digital transformation for enterprises by utilizing one of the world's largest digital infrastructure networks, as per the note cited by CNBC-TV18.

Tata Communications may also see strong growth potential in its digital services business, where it is already ranked in the 'Leaders’ quadrant, the brokerage added.

Macquarie noted that the company’s return on invested capital (ROIC) dropped from an average of 16 percent during FY21–FY23 to around 11 percent in FY25 due to recent acquisitions in its digital portfolio. The firm noted that ROIC will recover and cross 20 percent by FY28, moving closer to the Tata Group company's long-term target of 25 percent.

Tata Communications shares have gained over 8 percent in the past one month, and is up over 5 percent in 2025 so far. While the stock dropped nearly 4 percent in the past one year, it gained over 192 percent in the past five years.

The stock currently has an adjusted P/E ratio of over 51. Over 32 lakh shares of the company have been involved in active trade today, which is over 11 times higher than the stock's 10-day average.

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