TATACOMM - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.1

📊 Fundamental Analysis

Tata Communications (TATACOMM) presents a compelling long-term investment case with some caveats

ROE (55.2%): Exceptionally high, indicating strong shareholder value creation.

ROCE (14.8%): Decent, though not outstanding for a telecom-tech hybrid.

Debt-to-Equity (4.09): High leverage—this is a red flag for long-term risk, especially in volatile macro conditions.

PEG Ratio (-13.8): Negative PEG suggests earnings contraction or unreliable growth projections.

Dividend Yield (1.45%): Reasonable, adds passive income potential.

P/E (47.4) vs Industry P/E (50.7): Slightly undervalued relative to peers.

📈 Technical & Price Trend Insights

Current Price: ₹1,729

DMA 50 / DMA 200: ₹1,703 / ₹1,686 — price is above both, indicating bullish momentum.

RSI (51.0): Neutral zone, no overbought/oversold signal.

MACD (7.65): Bullish crossover, momentum building.

Volume: Above weekly average, confirming interest.

🧠 Long-Term Investment Outlook

Tata Communications is a digital infrastructure leader with global operations in cloud, IoT, and managed services. Despite short-term profit volatility, its 5-year return of 175% and strategic partnerships (e.g., AWS) suggest long-term growth potential.

Forecasted Price Targets

Year Lower Target Upper Target

2026 ₹2,108 ₹2,213

2027 ₹2,392 ₹2,529

2030 ₹3,296 ₹3,533

Source: Finco Panda, Daily Bulls

💰 Ideal Entry Price Zone

Based on valuation and technical support

Entry Zone: ₹1,660–₹1,705 This range aligns with DMA levels and historical support. Below ₹1,660, it becomes a strong value buy.

🧭 If You Already Hold the Stock

Exit Strategy / Holding Period

Hold for 5–7 years to capture digital transformation tailwinds.

Partial Exit near ₹2,100–₹2,200 if valuations stretch or debt remains elevated.

Exit Trigger: If ROE drops below 30% or debt-to-equity rises further.

Broker Sentiment

CLSA: Target ₹2,100, “Outperform” rating

ICICI Securities: Target ₹1,855–₹1,927, “Hold” to “Buy” depending on quarter

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📌 Summary

Metric Value Verdict

ROE / ROCE 55.2% / 14.8% Strong / Moderate

PEG Ratio -13.8 Risky growth outlook

Debt-to-Equity 4.09 High leverage

Dividend Yield 1.45% Decent

P/E vs Industry 47.4 vs 50.7 Slightly undervalued

Entry Price Zone ₹1,660–₹1,705 Attractive

Exit Strategy ₹2,100–₹2,200 Partial exit zone

Would you like a side-by-side comparison with Bharti Airtel or Indus Towers to explore telecom alternatives?

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