Pickup in digital margins could help Tata Communications stock rerate

Analysts calculate that data revenue of ₹27,300 crore in FY28 is possible, given growth in digital portfolio due to megatrends like cloud, AI, IoT etc

In a recent analyst meet, Tata Communications reiterated it had a data revenue target of ₹28,000 crore but postponed the timeline, with a delay of a few quarters, to FY28 from an earlier guidance of achieving it in FY27. Given revenue of ₹19,500 crore in FY25, this implies a compounded annual growth rate (CAGR) of 26 per cent during FY25-FY28. Guidance includes consolidated earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin of 23-25 per cent by FY27 and consolidated pre-tax RoCE (return on capital employed) of above 25 per cent and a net debt to Ebitda ratio of below