JM Financial rates Tata Communications as a Buy

JM Financial has begun coverage of Tata Communications with a "Buy" rating. They set a target price of Rs 2,030, suggesting a potential increase of 35% from the current price of Rs 1,597.65. Tata Communications is a mid-cap telecommunications company with a market capitalization of Rs 45,014.33 crore. The company reported a net profit of Rs 223.88 crore for the last quarter of 2024, while its total income reached Rs 5,826.80 crore, a slight increase from the previous quarter. The company's major products include telecommunication services. JM Financial expects strong growth in the data segment, projecting an EBITDA growth rate of around 21% from FY24 to FY28. Promoters own 58.86% of Tata Communications as of December 2024, while foreign institutional investors (FIIs) hold 17.8% and domestic institutional investors (DIIs) own 13.61%. The key risks include weak global economic conditions and potential regulatory challenges.