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Investing.com - Macquarie initiated coverage on Tata Communications (NSE:TATA) (NS:TCOM) with an Outperform rating and a price target of INR2,300.00 on Wednesday.
The research firm cited Tata Communications’ expanded service offerings spanning connectivity, cloud, communication services, and IoT, which are driving larger and longer-term deal wins aligned with the company’s strategy of "going deeper with fewer" clients.
Macquarie highlighted that Tata Communications now serves 290 million-dollar customers, representing a 35% increase over four years, with 35 clients generating over US$5 million (up 35%) and 30 clients exceeding US$10 million (doubled).
The firm projects an 11% revenue compound annual growth rate (CAGR) for Tata Communications from fiscal years 2025 to 2028, alongside more substantial growth in EBITDA (16% CAGR) and EBIT (30% CAGR).
Macquarie expects Tata Communications’ margins to improve by 300-500 basis points as the company achieves scale benefits for its currently loss-making Digital Portfolio, resulting in stickier revenue streams and more productive growth.
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