Tata Communications
Tata Communications
TelecomKey Fundamentals
MidcapTelecom Service ProviderTelecomTapetide Score
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Key Insights
Strengths
2- Company has a good return on equity (ROE) track record: 3 Years ROE 47.5%
- Company has been maintaining a healthy dividend payout of 45.9%
Weaknesses
4- Stock is trading at 13.9 times its book value
- The company has delivered a poor sales growth of 7.72% over past five years.
- Contingent liabilities of Rs.18,056 Cr.
- Company might be capitalizing the interest cost
Growth Rate
AI Analysis — Bull vs Bear
Tata Communications has a market capitalisation of about Rs 47,433 Cr. It trades at a P/E of 50.9x and a P/B of 13.82x, and its dividend yield is 1.05%. Sales have grown at a 12% CAGR over 3 years and 8% TTM, but profit has fallen at a 15% CAGR over 3 years and is flat TTM. ROE has dropped from a 3-year average of about 48% to 33% last year, and contingent liabilities stand at Rs 18,056 Cr.
- Return on equity is high. It averaged about 48% over 3 years and 74% over 5 years, and was still 33% last year. This suggests the company uses its equity base efficiently.
- Revenue growth has picked up. The 3-year sales CAGR is 12%, compared with 8% over 5 years and 3% over 10 years. This points to faster growth in recent periods.
- Sales are still growing at 8% TTM, which suggests the top line has held up despite pressure on profits.
- The company pays out about 45.9% of profits as dividends. This gives a 1.05% yield and shows it can return cash to shareholders.
- Over the long term, the stock has returned a 17% CAGR over 10 years, and profit has compounded at 49% over the same period. That reflects a recovery from a much weaker base.
- The stock has returned -4% CAGR over 3 years and 3% over 5 years. Much of the earlier rerating has already unwound, so part of the multiple compression has taken place.
- TTM profit growth is 0%, compared with a -15% CAGR over 3 years. This may mean the earnings decline is levelling off rather than getting worse.
- The P/E of 50.9x is high for a business whose profit has fallen at a 15% CAGR over 3 years and 4% over 5 years. The valuation looks out of step with recent earnings.
- At 13.82x book value, the stock carries a large premium to its net worth. That leaves little room for error if growth or returns disappoint.
- Contingent liabilities total Rs 18,056 Cr, which is roughly 38% of the Rs 47,433 Cr market cap. If a meaningful share of these crystallise, the balance sheet could take a significant hit.
- Profits are not keeping up with revenue. Sales grew at a 12% CAGR over 3 years while profit shrank at a 15% CAGR, which points to margin pressure or rising costs.
- ROE has fallen from about 74% (5-year average) and 48% (3-year average) to 33% last year. Returns are trending down.
- The company may be capitalising interest costs. If so, reported profits could be overstated compared with a fully expensed treatment, which weakens the 50.9x P/E as a quality signal.
- Long-term sales growth is weak, at a 7.72% CAGR over 5 years and 3% over 10 years. This limits the case for a premium multiple.
- Shareholder returns have been muted, with a -4% CAGR over 3 years and 3% over 5 years. Recent periods have not added value for holders.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Short-term borrowing costs rising Sep 29
Tata Communications allotted ₹550 crore of commercial paper at a 6.20% discount rate, up from 5.99% on the ₹400 crore CP issued Sep 11 (redeemable Oct 22). That is ₹950 crore of CP in under three weeks, with funding costs up about 21 bps.
- Company Secretary Zubin Patel exits Sep 25
Zubin Adil Patel resigned as Company Secretary and Compliance Officer, effective October 31, 2026, to pursue external opportunities. The company now has to fill a key governance role.
- ITAT relief in AY 2011-12 Sep 26
ITAT Mumbai disposed of cross-appeals for AY 2011-12 and granted Tata Communications relief on Section 80-IA and Transfer Pricing matters. This reduces a legacy tax overhang.
- Canada unit settles CRA tax claims Sep 15
Tata Communications (Canada) reached an in-principle agreement with the Canada Revenue Agency on September 14, 2026, covering international telecom services claims. No material financial impact is expected. Final documents are still pending, with no set timeline.
- Investor conference participation Sep 23
The company attended the Anand Rathi G-200 Summit on September 21 and the PL Capital Mid and Small Cap Conference on September 28, 2026, both in Mumbai, to meet institutional investors.
- ₹35.20 crore large trade flagged Sep 23
About 207,943 shares changed hands on BSE at ₹1,693.00, worth ₹35.20 crore in total. A trade-scanning system flagged the deal, and the exchange has not confirmed it.
- Kaleyra Africa subsidiary shut down Sep 8
Tata Communications closed its South Africa subsidiary Kaleyra Africa, effective September 4, which simplifies its Kaleyra-related structure.
TL;DR: Tata Communications is clearing legacy tax disputes, with ITAT relief for AY 2011-12 and an in-principle CRA settlement in Canada that has no material impact expected. Both reduce contingent liability risk. On the other side, it is leaning more on short-term commercial paper (₹950 crore in September) at rising rates, and the Company Secretary is leaving. The shares eased from ₹1,745 on Sep 15 to about ₹1,693 by Sep 23. The near-term setup is steady to slightly better. Watch whether the Canada settlement is finalised, who replaces the Company Secretary, and how CP refinancing costs move.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 4,771 | 4,872 | 5,588 | 5,645 | 5,592 | 5,728 | 5,798 | 5,990 | 5,960 | 6,100 | 6,189 | 6,554 | 6,583 |
| Expenses | 3,747 | 3,857 | 4,435 | 4,569 | 4,456 | 4,598 | 4,617 | 4,868 | 4,823 | 4,926 | 4,961 | 5,270 | 5,353 |
| Operating Profit | 1,024 | 1,015 | 1,153 | 1,076 | 1,137 | 1,129 | 1,181 | 1,122 | 1,137 | 1,174 | 1,228 | 1,284 | 1,230 |
| OPM % | 21% | 21% | 21% | 19% | 20% | 20% | 20% | 19% | 19% | 19% | 20% | 20% | 19% |
| Other Income | 191 | 25 | -212 | -32 | 85 | 29 | -7 | 926 | -46 | -38 | 183 | 63 | -93 |
| Interest | 131 | 137 | 184 | 186 | 170 | 189 | 187 | 182 | 177 | 202 | 201 | 182 | 186 |
| Depreciation | 580 | 605 | 603 | 651 | 634 | 648 | 637 | 672 | 666 | 679 | 751 | 731 | 739 |
| PBT | 504 | 298 | 154 | 207 | 417 | 321 | 350 | 1,193 | 249 | 255 | 458 | 434 | 211 |
| Tax % | 26% | 26% | 74% | -52% | 21% | 30% | 36% | 15% | 26% | 32% | 22% | 42% | 41% |
| Net Profit | 382 | 221 | 45 | 322 | 333 | 227 | 236 | 1,041 | 190 | 183 | 364 | 259 | 130 |
| EPS in Rs | 13.39 | 7.74 | 1.57 | 11.27 | 11.68 | 7.97 | 8.28 | 36.5 | 6.67 | 6.42 | 12.82 | 9.24 | 4.71 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 19,913 | 18,149 | 17,620 | 16,772 | 16,525 | 17,068 | 17,100 | 16,725 | 17,838 | 20,969 | 23,109 | 24,803 | 25,426 |
| Expenses | 16,919 | 15,714 | 15,214 | 14,359 | 13,780 | 13,779 | 12,840 | 12,498 | 13,520 | 16,739 | 18,540 | 19,980 | 20,510 |
| Operating Profit | 2,994 | 2,434 | 2,406 | 2,412 | 2,745 | 3,289 | 4,261 | 4,227 | 4,318 | 4,230 | 4,569 | 4,822 | 4,916 |
| OPM % | 15% | 13% | 14% | 14% | 17% | 19% | 25% | 25% | 24% | 20% | 20% | 19% | 19% |
| Other Income | 291 | 82 | 1,294 | -116 | 62 | -321 | 82 | 338 | 440 | 47 | 1,033 | 162 | 114 |
| Interest | 751 | 409 | 367 | 344 | 397 | 471 | 420 | 360 | 432 | 644 | 729 | 762 | 771 |
| Depreciation | 2,161 | 1,864 | 1,866 | 1,906 | 2,068 | 2,358 | 2,314 | 2,205 | 2,262 | 2,470 | 2,592 | 2,827 | 2,900 |
| PBT | 373 | 243 | 1,467 | 46 | 343 | 140 | 1,609 | 2,000 | 2,063 | 1,163 | 2,281 | 1,396 | 1,358 |
| Tax % | 99% | 96% | 16% | 778% | 80% | 162% | 22% | 26% | 14% | 18% | 21% | 31% | — |
| Net Profit | 3 | 10 | 1,235 | -326 | -80 | -85 | 1,252 | 1,485 | 1,801 | 970 | 1,837 | 997 | 936 |
| EPS in Rs | 0.05 | 0.3 | 43.26 | -11.53 | -2.89 | -3.02 | 43.88 | 51.99 | 63.02 | 33.98 | 64.43 | 35.14 | 33.19 |
| Div. Payout % | 12151% | 1412% | 14% | -39% | -156% | -133% | 32% | 40% | 33% | 49% | 39% | 50% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 285 | 285 | 285 | 285 | 285 | 285 | 285 | 285 | 285 | 285 | 285 | 285 |
| Reserves | 36 | -648 | 1,307 | 214 | -467 | -1,563 | -170 | 643 | 1,233 | 1,501 | 2,736 | 3,162 |
| Borrowings | 13,076 | 14,231 | 9,214 | 8,927 | 9,935 | 12,413 | 11,394 | 9,122 | 8,577 | 11,263 | 12,357 | 12,249 |
| Other Liabilities | 10,798 | 11,230 | 10,228 | 10,131 | 10,198 | 10,996 | 9,797 | 9,588 | 10,424 | 11,316 | 11,065 | 12,591 |
| Total Liabilities | 24,195 | 25,098 | 21,033 | 19,557 | 19,951 | 22,131 | 21,306 | 19,638 | 20,519 | 24,365 | 26,444 | 28,287 |
| Fixed Assets | 14,704 | 14,444 | 10,929 | 10,797 | 11,289 | 12,768 | 11,520 | 10,936 | 10,500 | 13,467 | 13,919 | 15,481 |
| CWIP | 638 | 800 | 751 | 520 | 361 | 349 | 493 | 852 | 1,148 | 1,327 | 1,100 | 850 |
| Investments | 1,768 | 1,837 | 2,434 | 1,250 | 1,491 | 1,563 | 2,233 | 1,565 | 1,951 | 1,608 | 2,714 | 2,297 |
| Other Assets | 7,086 | 8,017 | 6,920 | 6,990 | 6,809 | 7,451 | 7,060 | 6,284 | 6,921 | 7,963 | 8,711 | 9,659 |
| Total Assets | 24,195 | 25,098 | 21,033 | 19,557 | 19,951 | 22,131 | 21,306 | 19,638 | 20,519 | 24,365 | 26,444 | 28,287 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 3,028 | 2,363 | 2,394 | 1,713 | 1,844 | 2,525 | 3,180 | 4,204 | 4,384 | 3,182 | 2,911 | 4,479 |
| Investing | -1,908 | -2,313 | 940 | -500 | -2,284 | -1,521 | -2,007 | -894 | -1,836 | -2,641 | -2,173 | -1,434 |
| Financing | -1,388 | -9 | -3,276 | -959 | -28 | -942 | -1,205 | -3,431 | -2,241 | -813 | -936 | -2,937 |
| Net Cash Flow | -268 | 41 | 58 | 254 | -467 | 61 | -32 | -121 | 308 | -272 | -198 | 108 |
| Free Cash Flow | 1,257 | 334 | 598 | 102 | 106 | 844 | 1,828 | 2,554 | 2,899 | 1,110 | 711 | 2,060 |
| CFO/OP | 105 | 114 | 130 | 82 | 88 | 85 | 86 | 97 | 106 | 80 | 82 | 108 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 46 | 61 | 54 | 64 | 66 | 69 | 56 | 56 | 56 | 65 | 63 | 61 |
| Cash Conversion Cycle | 46 | 61 | 54 | 64 | 66 | 69 | 56 | 56 | 56 | 65 | 63 | 61 |
| Working Capital Days | -155 | -139 | -105 | -125 | -124 | -150 | -88 | -103 | -119 | -151 | -107 | -120 |
| ROCE % | 8% | 7% | 23% | 8% | 8% | 9% | 18% | 22% | 24% | 18% | 15% | 15% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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63 extracted metrics + investor summaries across FY10–FY27.
Documents
Frequently Asked Questions about Tata Communications
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Company Information
Tata Communications was incorporated on March 19, 1986 as VSNL. In February 2002, the Government of India, as per their disinvestments plan, sold 25% of their holding in the company to the strategic partner. Consequently, the company was taken over under the administrative control of TATA. [1] It is the leading global digital ecosystem enabler. It has a leadership position in emerging markets, and an infrastructure that spans the globe. It delivers managed solutions to multinational companies and service providers. It partners with 300 of the Fortune 500 companies with their state-of the-art solutions, including a wide range of communication, collaboration, cloud, mobility, connected solutions, network and data center services. [2]
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