Tata Communications Defers FY27 Guidance by a Year; Stock Falls

Shares of Tata Communications fell up to 1.7% in early trade on June 11, today, after the company deferred the revenue growth, margin leverage and return on capital employed (RoCE) guidance by a year at its investor day on June 10. The communications services provider said that the earlier revenue guidance of ₹280bn for FY27 is now likely to be delayed by a few quarters and the 23-25% EBITDA margin guidance along with a 25% RoCE guidance will now be achieved in FY28.

The stock, on Tuesday, closed 0.6% lower at ₹1,735 on the National Stock Exchange. At its Tuesday close, the stock was over 34% above its 52-week low level and 20% below its 52-week high level. Shares of the company have lost nearly 7% in the last one year, but have gained nearly 2% in 2025 so far. The stock has gained over 14% in the last one month.

The company’s management has guided for a double-digit EBITDA margins in its digital portfolio over a period of time, CNBC-TV18 reported. It has incurred an EBITDA loss of ₹900 crore in FY25. Focus on inorganic growth via mergers and acquisitions, along with divestment of non-core assets will continue to remain a key focus area for the company, Tata communications said.

Although the deferral is made official for the first time, Nuvama said that it was largely anticipated and already priced in. The brokerage said it continues to be positive on the unique technology and telecom play, expecting digital growth and consolidated margins to pick up sharply in FY26. This will likely result in stronger growth during FY26 and FY27, the brokerage firm added.

Nuvama maintained its ‘buy’ rating on the stock and raised the target price by 5% to ₹2,000 apiece, as it sees the stock as an exciting play, “offering the best of both the worlds—stability of telecom and growth potential of the IT Services sector”.