Buy Tata Communications; target of Rs 1927: Geojit Financial Services

Geojit Financial Services recommended accumulate rating on Computer Age Management Services with a target price of Rs 1927 in its research report dated April 03, 2025.

Broker Research

April 04, 2025 / 11:06 IST

Buy

26 Aug, 2025 12:21

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Geojit Financial Services research report on Tata Communications

Tata Communications operates in 190+ countries, serving 7,000+ clients, including 300+ Fortune 500 companies. It is a major global network services provider, offering software-defined networking solutions. In Q3FY25, Tata Communication Ltd revenue increased 3.8% YoY to Rs. 5,798cr, driven higher data-segment revenue. Data segment revenue grew 6.2% YoY to Rs. 4,903cr, aided by growth in core connectivity by 2.8% YoY to Rs. 2,590cr and digital portfolio by 10.2% YoY to Rs 2,313cr. Collaboration and Managed CPaaS rose 11.7% YoY to Rs. 1,177cr, aided by the launch of Kaleyra.Ai, which boosted enterprise customer adoption. Next Gen connectivity grew 9.2% to Rs. 248cr, supported by cloud adoption by customers, internet-based operations, and AI advancement. Cloud and Security fabric increased 12.5% YoY to Rs. 432cr, underpinned by the expansion of security portfolio. EBITDA increased 2.4% YoY to Rs. 1,181cr, driven by lower other expenses (-4% YoY) and employee benefits (-1.1% YoY). However, EBITDA margin declined 20bps YoY to 20.4%. Reported PAT expanded 424.0% YoY to Rs. 236cr, on higher topline.

Outlook

Therefore, we assign a Buy rating on the stock with a target price of Rs. 1,927, based on 23x FY27E adjusted EPS.

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