Revenue and Margin Dreams Deferred: Tata Communications Sets Sights on FY28

Tata Communications has revised its financial guidance timelines, shifting revenue growth, profitability targets, and RoCE aspirations to FY28. The announcement was made during the company’s investor day and comes amid a broader focus on strategic mergers and acquisitions, as well as streamlining its portfolio through divestment of non-core assets.

Tata Communications Revised Guidance to FY28

Tata Communications Ltd., a part of the Tata Group, stated that it now aims to achieve its previously stated growth and margin targets by FY28, one year later than its original FY27 objective. The extension reflects a more calibrated approach in response to current business realities and investment requirements in the digital segment.

Management at the investor day disclosed that achieving the earlier guidance required a steep growth trajectory, which has now been rationalised. As part of this revision, the company reiterated its focus on long-term value creation.

Digital Portfolio to Drive Future EBITDA Growth

The management underlined efforts to transform the digital portfolio into a profitable segment. For FY25, the digital business posted an EBITDA loss of ₹900 crore. The company now expects this vertical to deliver double-digit EBITDA margins over a longer horizon.

Several initiatives were shared regarding pipeline monetisation across digital platforms and services. These are anticipated to gradually reduce the operating deficit in the digital business.

Strategic Focus on Mergers, Acquisitions and Divestments

Inorganic growth remains central to Tata Communications’ strategy. The company continues to explore merger and acquisition opportunities that complement its core operations and strengthen its position in key markets.

Simultaneously, divestment of non-core assets will be prioritised to streamline operations and reallocate capital towards high-growth areas. This dual strategy is intended to enhance overall efficiency and deliver better returns on invested capital.

Tata Communications Share Price Performance

On June 11, 2025, Tata Communications share price opened at ₹1,729.80 on NSE. During the day, it surged to an intraday high of ₹1,733.80. As of 2:02 PM, the stock is trading down by 1.22% at ₹1,713.50. 

Over the past week, the stock has moved higher by 3.11%; over the past month, it has advanced 10.84%; and over the past 3 months, it has seen a surge of 26.35%.

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Conclusion

Tata Communications has recalibrated its growth expectations by extending its key financial targets to FY28. The focus remains on transforming its digital segment into a profitable contributor, while continuing its active pursuit of mergers and acquisitions and asset optimisation. Despite a market dip post-announcement, the long-term strategic direction appears unchanged.

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