Tata Communications Limited delivered exceptional financial results for the second quarter of FY27, with consolidated profit after tax (PAT) reaching ₹341.03 crore for the quarter ended September 30, 2026. According to Business Standard, this represents a remarkable 86.29% year-on-year increase from ₹183.06 crore reported in Q2FY26, demonstrating significant growth in the company's profitability. The company also achieved revenue growth of 9.6% YoY to ₹6,687.89 crore compared to ₹6,099.75 crore in the corresponding quarter of the previous fiscal year. When compared to the previous June quarter, the profit more than doubled and revenue was up by 1.6%.
The company's operational performance showed strong momentum with Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) growing 21.1% year-on-year to ₹1,422 crore. As reported by The Economic Times, EBITDA margins expanded by 202 basis points to 21.26% in Q2FY27, compared to 19.24% in the corresponding quarter last year. According to Motilal Oswal's latest research report dated October 15, 2026, EBITDA rose 21% YoY (5% beat), with EBITDA margin expanding ~200bp YoY to 21.3%, driven by lower digital losses. This improvement reflects enhanced operational efficiency and effective cost management during the quarter. ICICI Securities research report dated October 16, 2026, highlights that digital profitability improved noticeably, with EBITDA margin narrowing to negative 3.6% from negative 6.9% in Q1FY27.
According to Business Standard, data revenue grew to ₹5,810 crore while digital portfolio revenue rose to ₹3,016 crore during Q2FY27. As per Motilal Oswal's report, data revenue grew 12.2% YoY (+1.8% QoQ), driven by healthy performance across the digital portfolio which grew 19% YoY (+2.6% QoQ). The company's diversified revenue streams continue to show strong performance across different business segments, with the digital portfolio contributing significantly to overall growth. ICICI Securities research report notes that digital portfolio revenue increased 18.6% YoY, with the company remaining focused on profitable growth led by recurring and network revenues. This revenue composition reflects the company's strategic focus on emerging technologies and digital transformation services.
The strong financial results triggered a positive market response, with shares of Tata Communications rising as much as 9.49% to hit an intraday high of ₹1,816.45 on the BSE, against the previous close of ₹1,659 per share. According to The Economic Times, the stock was last seen trading at ₹1,812.55, up 9.26%, amid sustained buying interest. Motilal Oswal has maintained a Neutral rating on TCOM with a revised target price of ₹1,980, as reported in their research dated October 15, 2026. ICICI Securities has taken a more bullish stance, recommending a buy rating with a target price of ₹2,130 in their research report dated October 16, 2026. At that price, the company's market capitalization stood at ₹51,686 crore on the BSE, reflecting investor confidence in the company's improved performance metrics and growth trajectory.
ICICI Securities research report identifies two key megatrends supporting Tata Communications' superior growth prospects: surging global network demand driven by expanding data centre connectivity needs, which is accelerating subsea and terrestrial cable capacity utilisation, and active investments in infrastructure capabilities. Additionally, AI-driven enterprise demand broadening across platforms and services, including inferencing, enterprise intelligence, and voice AI agents. The company's focus on profitable growth through recurring and network revenues, combined with these structural tailwinds, positions it well for sustained performance improvement. ICICI Securities maintains their estimates with an SoTP-based target price of ₹2,130 (core business valued at 12x EV/EBITDA) while retaining their buy rating.
