Hold Tata Communications; target of Rs 1840: Emkay Global Financial

Emkay Global Financial recommended hold rating on Tata Communications with a target price of Rs 1840 in its research report dated October 25, 2023.

Broker Research

October 27, 2023 / 13:06 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Tata Communications

TCom declined by 11%, following Q2FY24 results. Although Q2 results were broadly in-line, the steep correction following the result is largely due to moderation in underlying growth in Q2 with digital portfolio growth at 16.4% YoY (-1.2% QoQ) vs. 28% YoY (+8.6% QoQ) in Q1. Moreover, management’s short-term margin guidance below 20% was also taken negatively. However, structurally, we remain positive on TCom. We like TCom’s focus on digital services. Digital services (ex-Collaboration) has been delivering good performance. Kaleyra’s acquisition will aid growth in collaboration. Focus on gaining scale and synergies can help improve margin faster.

Outlook

We see earnings improving at a fast pace from FY25 post peak investments in FY24, although the stock may consolidate in the interim. We retain our HOLD rating.

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