Tata Communications Q2FY27 Revenue Rises 10% to ₹66.9 Billion as EBITDA Margin Reaches 21.3%

Market snapshot: Tata Communications reported a strong financial performance for Q2FY27, highlighted by an 86.3% year-on-year surge in net profit to ₹341 crore and a 9.6% increase in consolidated revenue to ₹6,688 crore. Operating performance beat consensus estimates as EBITDA increased 21.1% to ₹14,220 million with margins expanding to 21.3%. Enterprise demand across data and digital interaction platforms continues to anchor operational momentum.

Data Snapshot

• Consolidated Q2FY27 revenue grew 9.6% YoY to ₹6,688 crore.
• Consolidated Q2FY27 EBITDA rose 21.1% YoY to ₹1,422 crore, with margins expanding to 21.3%.
• Consolidated Q2FY27 net profit jumped 86.3% YoY to ₹341 crore.

What's Changed

• EBITDA margin expanded to 21.3%, driven by higher operational leverage in digital services.
• Net profit increased 86.3% YoY from ₹183 crore in the prior-year period to ₹341 crore.
• Group structure optimization approved via transfer of Kaleyra Inc. ownership to Tata Communications Netherlands B.V.

Key Takeaways

• Revenue expanded 9.6% YoY to ₹6,688 crore due to sustained enterprise adoption of network and cloud services.
• Operational EBITDA outpaced revenue growth with a 21.1% YoY rise to ₹1,422 crore.
• Net profit expanded 86.3% YoY to ₹341 crore, reflecting reduced interest friction and operating leverage.
• Brokerage coverage maintains an Outperform rating with a target price of ₹2,600.

SAHI Perspective

The combination of double-digit operational margin recovery and strong enterprise digital service traction positions Tata Communications favorably within the enterprise digital ecosystem. Operating leverage from scale in data platforms is enabling margin retention above 21%.

Market Implications

Strong execution in cloud interconnectivity and customer interaction fabric reinforces enterprise telecom demand stability amidst broader macro market adjustments.

Trading Signals

Market Bias: Bullish

Supported by 21.1% YoY growth in EBITDA to ₹1,422 crore and margin expansion to 21.3%, driven by strong data segment operational performance.

Overweight: Enterprise Telecommunications, Cloud & Connectivity Infrastructure

Trigger Factors:

• Sustained quarterly EBITDA margin above 21%
• Continued growth momentum in digital platform services
• Debt leverage rationalization post group restructuring

Time Horizon: Near-term (0-3 months)

Industry Context

Enterprise connectivity and data center interconnect demands continue to scale as global enterprises transition to hybrid cloud environments and AI-assisted customer experience architectures.

Key Risks to Watch

• Capital expenditure intensity in cloud infrastructure and subsea network expansion.
• Currency fluctuations impacting international enterprise service revenue.

Recent Developments

On October 15, 2026, the Board of Directors approved transferring the company's entire shareholding in Kaleyra, Inc. to its wholly-owned Netherlands subsidiary to simplify group structure.

Closing Insight

Sustained execution in high-margin enterprise digital services provides strong earnings visibility for Tata Communications going forward.

High Performance Trading with SAHI.