Tata Comm Q1 FY26: Revenue Dips QoQ, Nuvama Raises Target to ₹2,020
Tata Communications Ltd reported a relatively soft performance for the first quarter of FY26, yet optimism around its digital growth story continues. Domestic brokerage Nuvama Institutional Equities has reaffirmed its ‘Buy’ rating on the stock, raising the 12-month target price slightly to ₹2,020 from the earlier ₹2,000, citing robust potential in the digital segment.
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On Friday, shares of Tata Communications settled 1.89% higher at ₹1,764.45.
Q1 FY26 Highlights:
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Revenue stood at ₹5,960 crore, reflecting a 0.5% decline quarter-on-quarter (QoQ), but a 6.6% increase year-on-year (YoY). This performance was broadly in line with Nuvama’s expectations.
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Data revenue rose 9.3% YoY, driven by a 17.1% growth in the digital segment, showcasing the company’s evolving digital services strategy.
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The consolidated EBITDA margin came in at 19.1%, improving 34 basis points (bps) QoQ, though it declined 125 bps YoY.
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Data margins slipped to 17.2%, down 31 bps QoQ and 210 bps YoY.
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Adjusted PAT (excluding exceptional items) was reported at ₹250 crore, aligning with analyst estimates.
However, reported PAT fell to ₹190 crore, impacted by exceptional expenses including ₹20.44 crore toward staff optimisation and ₹42.19 crore related to the sale of a subsidiary.
Meanwhile, the company’s net debt rose to ₹10,120 crore, compared to ₹9,380 crore at the end of Q4 FY25.
Analyst Outlook
Despite the underwhelming quarterly numbers, analysts at Nuvama remain confident in Tata Communications’ long-term growth, especially as it continues expanding in the digital services space. The brokerage believes the company is well-positioned to benefit from ongoing digital transformation trends, which could drive stronger revenue and margin performance in the coming quarters.
Tata Communications’ consistent focus on innovation and restructuring, despite short-term challenges, is seen as a positive for long-term investors.
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