Neutral Tata Communications; target of Rs 1850: Motilal Oswal
Motilal Oswal's research file on Tata Communications
Tata Communications (TCOM)'s 3Q consequences had been a combined bag as ~10% YoY revenue increase inside the wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital portfolio became offset by way of endured weak point in middle connectivity (-1% QoQ).
TCOM's adjusted EBITDA margin progressed ~150bp QoQ to 20% because of the deconsolidation of decrease-margin TCPSL and NetFoundry enterprise and barely decrease losses in the virtual portfolio. TCOM's revenue and EBITDA had been boosted by means of INR285m prior period revenue reputation. Adjusted sales/EBITDA ignored our estimates via ~3-four%, because of weaker increase in core connectivity.
Outlook
We ascribe an INR27b (or INR95/percentage) valuation to TCOM's 26% stake in STT records facilities. We roll ahead our estimates to Mar'27 and lift our SoTP-primarily based TP to INR1,850. After the latest correction, the inventory now trades at ~10% top rate to its LT common EV/EBITDA. Reiterate impartial.
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Tata Communications_23012025_Motilal Oswal
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