Key Events This Week
19 Jan: Stock opens strong at Rs.1,763.95 despite Sensex decline
21 Jan: Intraday low hit amid sharp 5.64% drop; Q3 results reveal margin pressures
22 Jan: Flat quarterly performance reported with record sales but margin concerns
23 Jan: Technical momentum shifts to bearish; stock closes at Rs.1,561.95
19 January 2026: Positive Start Amid Broader Market Weakness
Tata Communications began the week on a relatively firm note, closing at Rs.1,763.95, up 0.62% from the previous Friday’s close of Rs.1,753.10. This gain contrasted with the Sensex’s 0.49% decline to 36,650.97, indicating initial resilience in the stock despite broader market weakness. The volume was moderate at 5,495 shares, suggesting measured investor interest. However, this early strength was short-lived as the week progressed.
21 January 2026: Sharp Decline and Intraday Low Amid Earnings and Price Pressure
The stock experienced a significant setback on 21 January, falling 5.64% to close at Rs.1,617.55, with an intraday low of Rs.1,634.40. This decline was sharper than the Sensex’s 0.47% drop to 35,815.26, reflecting intensified selling pressure. The day also marked the release of Tata Communications’ Q3 FY26 results, which revealed a strong profit surge but raised concerns over margin pressures and elevated valuations.
The company reported record quarterly net sales of ₹6,188.97 crore and a PBDIT of ₹1,228.10 crore, alongside a PAT of ₹425.16 crore. Despite these headline figures, margin expansion remained elusive, with return on capital employed (ROCE) falling to 11.37%. The stock’s technical position deteriorated, slipping below all key moving averages, signalling a sustained bearish trend. Volume surged to 28,001 shares, underscoring the heightened market activity and investor caution.
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22 January 2026: Flat Quarterly Performance Amid Margin Pressures
On 22 January, Tata Communications reported a flat quarterly financial trend despite achieving record sales and profits. The stock closed at Rs.1,547.15, down 4.35% from the previous day, while the Sensex rose 0.76% to 36,088.66, highlighting the stock’s underperformance. The company’s financial trend score improved marginally to flat 3 from a negative -11, but margin pressures persisted with deteriorating capital efficiency and a drop in cash reserves to ₹327.43 crore.
Non-operating income accounted for nearly half of the profit before tax, raising sustainability concerns. The downgrade of the Mojo Grade from Buy to Hold reflected these mixed signals. The telecom services sector’s competitive pressures and rising capital expenditure requirements further weighed on sentiment. Volume surged to 68,274 shares, indicating active trading amid uncertainty.
23 January 2026: Technical Momentum Shift Amid Market Pressure
The week concluded with a technical momentum shift as Tata Communications closed at Rs.1,561.95, up 0.96% from the previous close but still reflecting a weekly loss of 10.90%. The stock’s technical indicators moved from mildly bullish to mildly bearish, with MACD and Bollinger Bands signalling increased selling pressure. The Relative Strength Index (RSI) remained mixed, bullish on weekly but neutral on monthly charts, suggesting short-term support amid broader weakness.
The stock’s underperformance relative to the Sensex continued, with a 12.06% weekly decline compared to the benchmark’s 1.29% fall. The MarketsMOJO Mojo Score stood at 50.0 with a Hold rating, underscoring a cautious outlook. Investors faced a complex technical landscape, balancing short-term rebounds against a prevailing bearish trend. Volume moderated to 13,595 shares as the market digested the week’s developments.
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Daily Price Comparison: Tata Communications vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-01-19 | Rs.1,763.95 | +0.62% | 36,650.97 | -0.49% |
| 2026-01-20 | Rs.1,714.15 | -2.82% | 35,984.65 | -1.82% |
| 2026-01-21 | Rs.1,617.55 | -5.64% | 35,815.26 | -0.47% |
| 2026-01-22 | Rs.1,547.15 | -4.35% | 36,088.66 | +0.76% |
| 2026-01-23 | Rs.1,561.95 | +0.96% | 35,609.90 | -1.33% |
Key Takeaways
1. Significant Underperformance: Tata Communications declined 10.90% over the week, markedly worse than the Sensex’s 3.31% fall, reflecting stock-specific challenges amid broader market weakness.
2. Mixed Financial Results: Despite record quarterly sales and profits, margin pressures and declining capital efficiency tempered optimism, contributing to a downgrade from Buy to Hold.
3. Technical Momentum Shift: The stock’s technical indicators turned mildly bearish, signalling increased caution and potential for further consolidation or downside.
4. Sector and Market Headwinds: The telecom services sector’s competitive pressures and the Sensex’s volatility compounded the stock’s challenges, underscoring a cautious investment environment.
Conclusion
Tata Communications Ltd’s week was characterised by a sharp price correction amid mixed earnings signals and a shift in technical momentum. While the company demonstrated operational resilience with record sales and profits, margin pressures and deteriorating capital returns have raised concerns about sustainable growth. The downgrade to a Hold rating and the stock’s underperformance relative to the Sensex highlight a cautious market stance. Investors should monitor upcoming quarterly updates and technical developments closely, balancing the company’s strong long-term fundamentals against near-term challenges and sector headwinds.
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