Hold Tata Communication; target of Rs 1855: ICICI Securities

ICICI Securities research report on Tata Communication

Tata Communications’ (TCom) H1FY25 revenue print was muted due to subdued orderbook in FY24, and longer deal conversion cycle. However, it has built a large sales funnel, which started showing benefits in H1FY25 with a few very large deal wins, and orderbook expanding by 25%. Further, new sales forces also started contributing to funnel, and it could help accelerate order booking. TCom still aspires to achieve digital business revenue of INR 180bn in FY27 (vs INR 44bn in H1FY25), and end FY25 with 20% EBITDA margin. It has made significant progress in monetisation of non-core asset on excess land. It is also reviewing other non-core assets which could help unlock value.

Outlook

Our estimates remain unchanged with TP of INR 1,855 based on 30x FY26E EPS. Maintain HOLD.