ICICI Securities research report on Tata Communications
Tata Communications’ (TCom) Q2FY26 EBITDA performance was modest, and partly restricted from one-time adjustment in TCR. Orderbook (OB) continues to be healthy with strong sales funnel. It remains excited on rising opportunities from DC-to-DC connectivity, and is exploring plans for an international launch. TCom has built-out products and capabilities in AI-powered services; initial customer traction has been good. It expects 10% of incremental revenue for digital services to come from newer beats. EBITDA margin progression has been slower than expected but headwinds remain largely transient.
Outlook
We maintain FY26/27 estimates, but SoTP-based TP has been revised to INR 2,390 (from INR 2,000) as we raise core business EV/EBITDA multiple to 14x (from 12x). Maintain BUY.
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