Tata Communications just made headlines for all the right reasons. Despite weak market cues and global slowdown fears, the Tata Communications share price jumped over 8% in a single trading session this week.
If you’ve been tracking the stock, you might be wondering — is this bounce a short-term market move or a sign of a deeper turnaround?
Let’s break down the story behind this spike!
What happened with the Tata communications share price?
On Tuesday, the Tata Communications share price opened at ₹1,361.05 on the BSE slightly lower than the previous day’s closing price of ₹1,372.40. But within hours, it soared to an intraday high of ₹1,500 and closed the session with gains of nearly 8%.
This rally came on a day when the broader markets were largely flat. The benchmark indices initially dipped 0.5% before ending the day unchanged — making Tata Communications one of the most notable movers of the day.
While this spike was significant, it wasn’t completely out of the blue. The Tata communications share price has been on a recovery path, having gained over 13% in just the last five trading sessions.
That said, the stock is still far below its 52-week high of ₹2,175, which it touched in October 2024. In fact, from that peak, the share is still down nearly 37%. So, is this recovery a new beginning or just a breather?
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Subsidiary sale completed
One of the key updates is the company’s recent business move. On 28 February 2025, Tata Communications announced the completion of the sale of its wholly-owned subsidiary — Tata Communications Payment Solutions Ltd (TCPSL) — to Transaction Solutions International (India) Pvt Ltd.
The deal, initially announced in November 2024, allows Tata Communications to sharpen its focus on core business areas like digital infrastructure and connectivity.
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Double upgrade by ICICI Securities
What really added fuel to the fire was ICICI Securities’ decision to upgrade Tata Communications from ‘Hold’ to ‘Buy’. Not just that, the brokerage revised the target price to ₹1,840, citing strong upside potential and improved business clarity.
Why the upgrade happened:
| Factor | Reason |
| Sales pipeline | Strong deal funnel, more large wins expected |
| Digital services | Growing portfolio focused on AI, cloud, security |
| Cost structure | Heavy lifting is done, scope for better margins |
| EBITDA outlook | Digital services expected to break even by FY27 |
| Connectivity business | Core EBITDA to grow at 5.9% CAGR over FY25–27 |
| Free cash flow | FY27 FCF estimated at ₹3,300 crore |
| Revenue | Digital services revenue CAGR projected at 17% |
Tata communications financial performance
| Metric | Value/Projection |
| FY25 EBITDA Loss (Digital Services) | ₹800 crore |
| FY27 EBITDA (Digital Services) | Break-even expected |
| FY27 Core Connectivity FCF | ₹3,300 crore |
| FY27 Core Connectivity EBITDA Margin | 45.2% (60 bps improvement) |
| FY27 Digital Services Revenue | ₹24,100 crore (vs target ₹28,000 crore) |
| FY27 FCF Yield | 4.5% |
| FY27 EV/EBITDA Multiple | 7.9x |
Even though the revenue target might be delayed by 12–18 months, ICICI Securities believes the company can still meet other financial goals like RoCE, EBITDA margin, and debt ratios — signalling good financial discipline.
What else is driving investor interest?
Apart from analyst upgrades, trading activity has also picked up. The trading volume on BSE surged to 69,000 shares compared to the 2-week average of 11,000 shares. Combined with NSE activity, the volume touched 3.13 million shares — a clear sign that investors are paying attention.
A shift in business focus: Cloud and AI at the centre
Tata Communications has been repositioning itself as more than just a connectivity provider. The company is now actively pushing into digital services — offering solutions in:
- Multi-cloud connectivity
- Secure Access Service Edge (SASE)
- Private cloud infrastructure
- AI-based enterprise services
- GPU-as-a-service
Analysts believe this transition is underappreciated by the market, especially given the growing demand for cloud and AI-based infrastructure in India and globally.
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So, what does it all mean for investors?
If you’ve been sitting on the sidelines watching the Tata communications share price fluctuate, this might be a good time to take a second look.
Sure, the stock has seen its share of volatility. But with cost pressures easing, a sharper business focus, and analyst confidence returning — the fundamentals are getting stronger.
And sometimes, in the stock market, it’s not just about chasing highs — it’s about catching the right story at the right time.
