Tata Communications Ltd (TATACOMM) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Bharti Airtel

Bharti Hexacom

Tata Comm

Vodafone Idea

Railtel Corpn.

Route Mobile

Tata Tele. Mah.

M T N L

Bharti Airtel PP

Megasoft

STL Networks

Why is Tata Communications Ltd ?

High Management Efficiency with a high ROCE of 18.37%

High Debt Company with a Debt to Equity ratio (avg) at 12.62 times

Poor long term growth as Operating profit has grown by an annual rate 6.65% of over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at 12.62 times

Poor long term growth as Operating profit has grown by an annual rate 6.65% of over the last 5 years

Negative results in Sep 25

OPERATING CF(Y) Lowest at Rs 2,910.81 Cr
PAT(Q) At Rs 197.29 cr has Fallen at -25.5% (vs previous 4Q average)
OPERATING PROFIT TO INTEREST (Q) Lowest at 5.81 times

With ROCE of 12.5, it has a Fair valuation with a 4.2 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 1.55%, its profits have risen by 0.9% ; the PEG ratio of the company is 50.4

High Institutional Holdings at 32.64%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 0.65% over the previous quarter.

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Tata Comm should be less than 10%
Overall Portfolio exposure to Telecom - Services should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Telecom - Services)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Tata Comm for you?

Medium Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Tata Comm

1.34%

0.05

29.40%

Sensex

4.7%

0.39

11.83%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.47%

EBIT Growth (5y)

6.65%

EBIT to Interest (avg)

3.96

Debt to EBITDA (avg)

2.45

Net Debt to Equity (avg)

4.52

Sales to Capital Employed (avg)

1.62

Tax Ratio

24.57%

Dividend Payout Ratio

38.80%

Pledged Shares

Institutional Holding

32.64%

ROCE (avg)

18.99%

ROE (avg)

188.12%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

18.46

EV to EBIT

33.41

EV to EBITDA

14.19

EV to Capital Employed

4.16

EV to Sales

2.74

PEG Ratio

50.39

Dividend Yield

1.35%

ROCE (Latest)

12.46%

ROE (Latest)

36.64%

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Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Bearish

Dow Theory

No Trend

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

1What is working for the Company

NET SALES(Q)

Highest at Rs 6,099.75 cr

-12What is not working for the Company

OPERATING CF(Y)

Lowest at Rs 2,910.81 Cr

PAT(Q)

At Rs 197.29 cr has Fallen at -25.5% (vs previous 4Q average

OPERATING PROFIT TO INTEREST (Q)

Lowest at 5.81 times

DEBT-EQUITY RATIO(HY)

Highest at 25.23 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 0.54 times

INTEREST(Q)

Highest at Rs 201.96 cr

EPS(Q)

Lowest at Rs 6.42

Loading Valuation Snapshot...

Here's what is working for Tata Comm

Net Sales - Quarterly

Highest at Rs 6,099.75 cr

in the last five quarters

MOJO Watch

Near term sales trend is positive

Net Sales (Rs Cr)

Here's what is not working for Tata Comm

Profit After Tax (PAT) - Quarterly

At Rs 197.29 cr has Fallen at -25.5% (vs previous 4Q average)

over average PAT of the previous four quarters of Rs 264.92 Cr

MOJO Watch

Near term PAT trend is very negative

PAT (Rs Cr)

Operating Cash Flow - Annually

Lowest at Rs 2,910.81 Cr and Fallen

each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (Rs Cr)

Operating Profit to Interest - Quarterly

Lowest at 5.81 times

in the last five quarters

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Interest - Quarterly

Highest at Rs 201.96 cr

in the last five quarters and Increased by 14.41 % (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (Rs cr)

Earnings per Share (EPS) - Quarterly

Lowest at Rs 6.42

in the last five quarters

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (Rs)

Debt-Equity Ratio - Half Yearly

Highest at 25.23 times

in the last five half yearly periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Debtors Turnover Ratio- Half Yearly

Lowest at 0.54 times

in the last five half yearly periods

MOJO Watch

Company's pace of settling its Debtors has slowed

Debtors Turnover Ratio