⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TATACOMM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | TATACOMM | Market Cap | 42,745 Cr. | Current Price | 1,498 ₹ | High / Low | 2,004 ₹ |
| Stock P/E | 60.5 | Book Value | 355 ₹ | Dividend Yield | 1.67 % | ROCE | 6.39 % |
| ROE | 5.93 % | Face Value | 10.0 ₹ | DMA 50 | 1,596 ₹ | DMA 200 | 1,687 ₹ |
| Chg in FII Hold | 0.85 % | Chg in DII Hold | -0.54 % | PAT Qtr | 306 Cr. | PAT Prev Qtr | 155 Cr. |
| RSI | 44.6 | MACD | -53.5 | Volume | 2,08,226 | Avg Vol 1Wk | 3,25,683 |
| Low price | 1,377 ₹ | High price | 2,004 ₹ | PEG Ratio | -3.11 | Debt to equity | 0.55 |
| 52w Index | 19.3 % | Qtr Profit Var | 127 % | EPS | 46.4 ₹ | Industry PE | 37.3 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT rose from ₹155 Cr. to ₹306 Cr. (127% growth), showing strong short-term momentum.
- Margins: ROE at 5.93% and ROCE at 6.39% reflect weak profitability and efficiency despite profit growth.
- Debt: Debt-to-equity ratio of 0.55 indicates moderate leverage, manageable but worth monitoring.
- Cash Flow: Supported by telecom and digital services, though margins remain thin.
💹 Valuation Indicators
- P/E Ratio: 60.5 vs Industry PE of 37.3 → significantly overvalued compared to peers.
- P/B Ratio: Current Price ₹1,498 vs Book Value ₹355 → ~4.22x, reflecting premium valuation.
- PEG Ratio: -3.11 → signals weak growth outlook despite high valuation.
- Intrinsic Value: Estimated fair value near ₹1,350–1,400, suggesting current price is slightly overvalued.
🌐 Business Model & Competitive Advantage
- Operates in telecom, digital infrastructure, and enterprise connectivity solutions.
- Competitive advantage lies in Tata Group backing, global network reach, and enterprise customer base.
- Challenges include low margins and high competition in telecom and digital services.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive between ₹1,350–1,400, closer to intrinsic value.
- Long-Term Holding: Suitable for investors seeking exposure to digital infrastructure; hold for 3–5 years with caution due to valuation risks.
✅ Positive
- Quarterly PAT growth of 127% shows strong earnings momentum.
- FII holdings increased (+0.85%), reflecting foreign investor confidence.
- Strong brand presence under Tata Group provides stability.
⚠️ Limitation
- Weak ROE (5.93%) and ROCE (6.39%) highlight poor efficiency.
- P/E ratio (60.5) is significantly higher than industry average.
- PEG ratio (-3.11) signals weak growth outlook.
📉 Company Negative News
- DII holdings decreased (-0.54%), showing reduced domestic institutional support.
- Valuation multiples are stretched compared to peers.
📈 Company Positive News
- Strong quarterly earnings growth.
- FII holdings increased, reflecting foreign investor confidence.
- Expanding digital infrastructure and enterprise services strengthen long-term outlook.
🏭 Industry
- Telecom and digital infrastructure industry is growing, driven by enterprise demand and digital transformation.
- Industry PE at 37.3 shows sector is moderately valued compared to Tata Communications’ premium.
- Global demand for connectivity and cloud services supports long-term growth.
🔎 Conclusion
Tata Communications demonstrates strong short-term profit growth and institutional support, but weak ROE/ROCE and high valuation multiples limit near-term attractiveness. Entry around ₹1,350–1,400 offers better risk-reward. Long-term investors can hold for 3–5 years, benefiting from digital infrastructure demand and Tata Group stability, though caution is advised due to premium valuation and modest efficiency.