Should you buy or sell Tata Communications shares post Q2? Analysts weigh

Tata Communications, reported a 19 per cent year-on-year (Y-o-Y) decline in its consolidated net profit at ₹183.21 crore for the second quarter of the financial year 2025-26 (Q2 FY26).

Tata Communications posted its Q2 results in market hours on Wednesday. Analysts see the company as an “exciting” play offering—stability of telecom and growth potential of the IT Services sector. Further, they believe the company’s digital growth and consolidated margins shall pick up sharply in FY26.

 

At 9:37 AM, Tata Communications' share price was trading 0.59 per cent higher at ₹1,967 per share. In comparison, Sensex was up 0.46 per cent at 82,982.73.  

Tata Communications Q2 FY26 Results: Key Highlights

• Consolidated net profit at ₹183.21 crore, down 19 per cent year-on-year (Y-o-Y) from ₹227.27 crore in Q2 FY25.
• Revenue from operations at ₹6,099.75 crore, up 6.5 per cent Y-o-Y from ₹5,727.85 crore in Q2 FY25.
• Ebitda at ₹1,174 crore, up 3.9 per cent Y-o-Y.
• Ebitda margin stood at 19.2 per cent. 

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Brokerages' view on Tata Communications stock

Motilal Oswal has reiterated a ‘Neutral’ rating, raising the target to ₹1,750 per share from ₹1,685. The brokerage in its note said, “We await sustained acceleration in data revenue growth, along with margin expansion, before turning more constructive on Tata Communications.”

 

After the recent run-up of 15 per cent in the last five days, Tata Communications now trades at 12.5x one-year forward EV/EBITDA (22 per cent premium to the LT average), according to Motilal Oswal. 

 

The brokerage’s FY26-28E revenue remains broadly unchanged, and it believes the company’s ambition of doubling data revenue by FY28 remains a tall ask without further acquisitions.

 

Nuvama Institutional Equities has maintained ‘Buy’ and has hiked the target to ₹2,235 (earlier ₹2,020). Analysts continue to see Tata Communications as an exciting play, offering the best of both worlds—stability of telecom and growth potential of the IT Services sector. 

 

“We are tweaking FY26E/27E Earnings before interest, tax, depreciation and amortisation (Ebitda) by -7 per cent/-0.5 per cent on lower margins in FY26—the sharp cut in FY26E EPS is driven by exceptional items and lower margins,” Nuvama said.