Tata Communications Ltd.
Telecom · NSE
52-week range
₹1,323 – ₹2,004
From 52w high
-20.5%
RSI (14)
58.8
vs SMA 50 / 200
↑ 50 · ↓ 200
Tata Communications (₹1,576.9) is a B2B digital infrastructure and cloud networking company with a trailing PE of 43.1, forward PE of 19.4, and ROE of 31.1% — the highest among its 6 Telecom peers. However, the company carries a debt-to-equity ratio of 335.5 with a rising debt trend, a 5-year earnings CAGR of -74.7%, and a profit margin of 4.04%, placing it last in sector quality ranking (score: 5 of 100). The stock is 21.3% below its 52-week high and 5.8% below its 200-DMA.
- ✓Highest ROE among 6 Telecom sector peers at 31.1% (ranked 1st of 6), versus Bharti Hexacom at 28.8% and Bharti Airtel at 23.1%.
- ✓Consolidated revenue of ₹6,554 crore in Q4 FY26 represents 9.4% Y-o-Y growth, demonstrating continued top-line expansion in a competitive B2B market.
- ✓FCF was positive in 4 of the available historical years, indicating the business generates cash despite elevated debt levels.
- ✓Forward PE of 19.4 represents a 54.9% compression from the trailing PE of 43.1, suggesting the market is pricing in significantly higher near-term earnings — if that expectation is met.
- ✗Debt-to-equity of 335.5 with a rising debt trend is extreme for a non-financial company; the ratio far exceeds all disclosed sector peers, with no indication of near-term deleveraging.
- ✗5-year earnings CAGR of -74.7% despite 9.4% revenue growth signals severe margin and cost-structure deterioration that has eroded the profit base over the medium term.
- ✗Quality score of 5 out of 100 ranks last (6th of 6) among Telecom peers (consistency score 47), reflecting weak overall financial health relative to the sector.
- ✗MD & CEO retirement announced April 2026 introduces leadership continuity risk during a period of active earnings pressure and debt accumulation.
- ·Q4 FY26 consolidated net sales of ₹6,554 crore were up 9.41% Y-o-Y, but Q4 FY26 profit fell according to multiple outlets — reinforcing the revenue-profit divergence visible in the 5-year data.
- ·The company acquired a stake in a Clean Max SPV (May 2026), adding a renewable energy exposure alongside its core digital infrastructure business.
- ·Analyst consensus stands at a mean rating of 2.11 across 9 analysts (1–5 scale, lower = more constructive).
- ?Does the 31.1% ROE reflect genuine operating returns, or is it arithmetically inflated by the D/E of 335.5 (high leverage reduces the equity denominator, boosting the ratio)?
- ?What is the structural explanation for the 74.7% 5-year earnings decline alongside consistent revenue growth — is it depreciation on new infrastructure, rising interest costs from debt, or margin dilution in the product mix?
- ?How does the leadership transition (CEO retirement) affect ongoing enterprise contract renewals and the execution of the company forward earnings guidance that the 19.4 forward PE implies?
- ?Has the Clean Max SPV acquisition and any other capital allocation decisions contributed to the rising debt trend, and what is management guidance on target leverage levels?
PE
43.1
Forward PE
19.4
ROE
+31.1%
Profit margin
+4.0%
D/E
335.49
Dividend yield
+1.6%
Quality score
5/100
ROE 5y above 15%
4/5 yrs
FCF 5y positive
4/5 yrs
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.Analysis generated 11 May 2026.