Posted on March 19, 2025, by Niftynews
Tata Communications stock has been generating significant attention in the market, thanks to its bullish outlook from top analysts. Currently trading at ₹1,506.2, experts are forecasting a 35% upside, which has led many to consider Tata Communications stock as a prime investment opportunity. The stock’s potential for growth is fueled by the company’s expanding digital portfolio and its position within the global telecom and data services markets.
JM Financial’s Buy Rating and Price Target for Tata Communications Stock
On March 19, 2025, JM Financial initiated coverage on Tata Communications stock with a “Buy” rating and set a target price of ₹2,030 per share. This represents a significant potential upside of 35% from its current price of ₹1,506.2. JM Financial’s bullish stance is primarily driven by the growth prospects of Tata Communications’ core data business, which is expected to perform strongly in the coming years.
JM Financial has valued Tata Communications’ data business at an 11x Enterprise Value-to-EBITDA multiple for FY2027. This is a slight premium over its historical valuation of 10.2x, reflecting the company’s expected growth trajectory. Analysts expect Tata Communications to achieve a 21% compound annual growth rate (CAGR) in EBITDA from FY2024 to FY2028, further boosting its stock value.
Digital Portfolio: A Long-Term Growth Driver
One of the key factors driving the long-term growth potential of Tata stock is its digital portfolio. As the world increasingly moves towards a digital economy, Tata Communications is positioned to capitalize on several high-growth areas, including cloud computing, cybersecurity, and data center services. These digital services are expected to be major contributors to the company’s revenue growth, enhancing the company’s market value and boosting the stock’s performance in the years ahead.
Tata Communications’ strong presence in digital services, especially in providing connectivity solutions to businesses worldwide, positions it as a key player in the global digital transformation. This portfolio expansion is expected to be a critical factor driving the stock’s future growth, making Tata stock an attractive investment.
Risks and Challenges
While the outlook for Tata stock is positive, there are potential risks that investors should be aware of. JM Financial has highlighted that global macroeconomic uncertainties, delayed discretionary spending, and regulatory challenges, particularly around the Adjusted Gross Revenue (AGR) ruling, could impact the company’s performance. These factors may cause a delay in Tata Communications’ growth targets, possibly pushing them back to FY2028 or beyond.
Investors should also keep an eye on the competitive landscape and technological advancements that could disrupt the telecommunications sector. However, despite these risks, the overall sentiment surrounding Tata Communications stock remains optimistic due to its strong fundamentals and promising growth prospects.
ICICI Securities Upgrades Tata Communications Stock to “Buy”
ICICI Securities has also shown confidence in Tata Communications stock, upgrading it from a “Hold” rating to a “Buy.” The firm has raised its price target for the stock to ₹1,840, up from ₹1,690. This upgrade comes after a recent decline in Tata Communications stock price, which ICICI Securities views as a favorable buying opportunity for investors. According to ICICI Securities, this price drop has created an attractive risk-reward scenario, making it an excellent time for investors to purchase Tata Communications stock.
Analyst Consensus on Tata Stock: Majority Bullish
Among the nine analysts currently covering Tata Communications stock, six have given it a “Buy” rating, one has a “Hold” rating, and two have issued a “Sell” recommendation. Despite a 21.7% drop in the stock price over the last six months, the majority of analysts are still confident about the long-term growth potential of Tata Communications stock. This consensus underscores the positive outlook for the company’s future performance and stock price appreciation.
Positive Market Momentum
As of March 19, 2025, Tata Communications stock was trading 2.72% higher, at ₹1,547 per share. This upward momentum in the stock price, coupled with strong recommendations from top analysts, signals a promising future for Tata Communications stock. With a solid digital strategy in place and an expected 35% upside, the stock remains one of the most exciting prospects in the telecom and data services sectors.
Conclusion:
With a strong digital portfolio, a positive outlook from leading analysts, and a 35% upside potential, Tata Communications stock is an excellent investment option. The combination of bullish ratings from firms like JM Financial and ICICI Securities, along with the company’s expanding presence in the digital space, positions Tata Communications stock for significant growth in the coming years. For investors looking for opportunities in the telecom sector, Tata Communications stock remains a top contender.
