TATACOMM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | TATACOMM | Market Cap | 45,044 Cr. | Current Price | 1,580 ₹ | High / Low | 2,004 ₹ |
| Stock P/E | 58.2 | Book Value | 371 ₹ | Dividend Yield | 1.58 % | ROCE | 8.69 % |
| ROE | 7.36 % | Face Value | 10.0 ₹ | DMA 50 | 1,535 ₹ | DMA 200 | 1,640 ₹ |
| Chg in FII Hold | -0.02 % | Chg in DII Hold | 0.65 % | PAT Qtr | 172 Cr. | PAT Prev Qtr | 306 Cr. |
| RSI | 58.0 | MACD | 27.9 | Volume | 2,87,583 | Avg Vol 1Wk | 6,03,389 |
| Low price | 1,322 ₹ | High price | 2,004 ₹ | PEG Ratio | -20.0 | Debt to equity | 0.52 |
| 52w Index | 37.9 % | Qtr Profit Var | 57.4 % | EPS | 27.9 ₹ | Industry PE | 41.0 |
📊 TATACOMM (Tata Communications Ltd.) shows moderate fundamentals with ROE of 7.36% and ROCE of 8.69%, reflecting limited efficiency. EPS of ₹27.9 provides earnings visibility, but quarterly PAT dropped sharply (₹306 Cr → ₹172 Cr), raising concerns about profitability consistency. Valuations are stretched with a P/E of 58.2 compared to industry average of 41.0, and a negative PEG ratio (-20.0) highlights poor growth-adjusted valuation. Dividend yield of 1.58% offers some income support, while debt-to-equity ratio of 0.52 remains manageable. Technical indicators show neutral-to-positive momentum with RSI at 58.0 and MACD at 27.9, though price trades below 200 DMA (₹1,640), reflecting medium-term weakness.
💰 Ideal Entry Price Zone: ₹1,520 – ₹1,560 (near 50 DMA support).
📈 Exit / Holding Strategy: Suitable for swing trades and medium-term holding. Consider profit booking near ₹1,620–₹1,650 resistance unless earnings improve. Long-term holding requires stronger ROCE and sustained profitability.
✅ Positive
- EPS of ₹27.9 supports valuation strength.
- Dividend yield of 1.58% provides income support.
- DII holdings increased (+0.65%), showing domestic investor confidence.
- Price trading above 50 DMA (₹1,535) reflects short-term support.
⚠️ Limitation
- Weak ROE (7.36%) and ROCE (8.69%).
- High P/E (58.2) compared to industry average (41.0).
- Negative PEG ratio (-20.0) indicates poor growth prospects.
- Quarterly PAT decline highlights earnings volatility.
- FII holdings decreased (-0.02%), showing reduced foreign interest.
📉 Company Negative News
- PAT dropped from ₹306 Cr to ₹172 Cr.
- Valuation premium compared to industry peers.
📈 Company Positive News
- Quarterly profit variation (+57.4%) shows recovery momentum.
- DII inflows highlight domestic institutional support.
- Technical indicators (RSI 58.0, MACD 27.9) show neutral-to-positive momentum.
🏭 Industry
- Telecom and digital infrastructure sector trades at PE 41.0.
- Industry supported by demand for enterprise connectivity and digital services.
🔎 Conclusion
TATACOMM is a cautious candidate for medium-term investment. Entry near ₹1,520–₹1,560 offers better risk-reward. Hold for swing trades with exits near ₹1,620–₹1,650. Long-term investors should wait for improved ROCE and sustained earnings before accumulation, as current valuations remain stretched relative to fundamentals.