Tata Communications shares surged over 5% to hit a two-month high of ₹1,609 on Thursday, April 23, following the company's Q4 FY26 results announcement. According to Mint, this marked the biggest single-day gain in over two months as investors reacted positively to the company's performance. Despite the sharp 65.44% year-on-year decline in net profit to ₹263 crore compared with ₹761 crore in the same period last year, analysts maintained their positive ratings citing strong order book and digital growth momentum.
According to Upstox, Tata Communications reported consolidated gross revenue growth of 9.4% YoY and 6% QoQ to ₹6,550 crore, coming in line with analysts' estimates. The data services division emerged as the standout performer with revenue rising 11.38% YoY to ₹5,704.61 crore compared to ₹5,121.55 crore in the year-ago period. The voice solutions segment showed steady growth with revenue at ₹387.56 crore, up 3.59% YoY from ₹374.12 crore in Q4 FY25. The campaign registry segment recorded impressive growth of 30.16% YoY to ₹235.31 crore from ₹180.79 crore, while real estate revenue climbed 10.1% YoY to ₹51.45 crore. However, the transformation services revenue fell 29.1% YoY to ₹225.72 crore.
According to Mint, Tata Communications delivered strong operational performance with EBITDA of ₹1,284 crore, a 14.4% increase from ₹1,122 crore in Q4 FY25. EBITDA margins stood at 19.6%, 90 basis points higher than the 18.7% recorded in the March 2025 quarter. The company reported adjusted PAT growth of around 7% YoY to ₹1,100 crore for FY26. For the quarter ended March 31, 2026, the company reported a consolidated income from operations of ₹6,554.15 crore, with the full-year revenue standing at ₹24,802.72 crore compared to ₹23,108.59 crore in the previous fiscal year.
According to Mint, Motilal Oswal Financial Services noted that the company's order book remains strong, with healthy double-digit YoY growth, driven by large deal wins in international markets. The deal pipeline remains robust, with the digital portfolio contributing around 70%. JM Financial also highlighted that the company's order book grew strongly in double digits YoY in Q4 FY26, supported by multiple deal wins across various data business segments. The international order book also saw strong growth during the quarter. As per Motilal Oswal, the company has transitioned through two phases—first achieving balance sheet discipline and then investing in digital capabilities both organically and inorganically—and is now entering a third phase focused on profitable growth and capital discipline.
According to Mint, JM Financial has retained its 'Buy' rating on the stock with a target price of ₹1,980 per share, based on a 10x FY28 EV/EBITDA multiple for the data segment, expecting segment EBITDA to grow at a robust CAGR of 20% over FY26–29E. Motilal Oswal has valued the company's data business at 9x FY28E EV/EBITDA and the voice and other businesses at 4x EV/EBITDA to arrive at a revised target price of ₹1,720 while retaining its 'Neutral' rating. The brokerage believes that acceleration in data revenue growth, along with margin expansion, remains key for a re-rating. Despite the profit decline, the market responded positively to the company's revenue growth and strong order book performance, reflecting investor confidence in the company's digital transformation strategy.
