The quarter in numbers

Tata Communications delivered what ICICI Securities calls a strong second quarter of FY27. Consolidated revenue rose 9.6% year-on-year and 1.6% sequentially to Rs 6,688 crore. EBITDA climbed 21.2% to Rs 1,422 crore, and the margin expanded about 210 basis points to 21.3%, helped by lower personnel and operating costs. Reported net profit jumped 86.3% to Rs 341 crore.

The headline growth carries a currency tailwind. Rupee depreciation lifted the translated value of overseas revenue; adjusted for forex, data revenue grew about 6% year-on-year, while digital revenue still grew in double digits.

Digital strands: where the growth is running

Digital platforms and services revenue rose 18.6% to Rs 3,016 crore and now makes up more than 51% of gross data revenue. Core connectivity grew a steadier 6% to Rs 2,794 crore. In the bundle below, each strand's thickness tracks its quarterly revenue.

• Collaboration and CPaaS led the pack, with its AI platform Commotion gaining traction among interaction-business customers.
• Next-gen connectivity jumped 27.1%, and the report notes that network conversations have moved from procurement desks to chief technology officers.
• Cloud and security slipped 5.3% sequentially while the company shifts to its own Vayu cloud, and GPU availability has been a constraint.
• Media services fell 4.5% year-on-year, hit by events cancelled due to the West Asia conflict and normal lumpiness.

Surfacing toward breakeven

Work orders: the AI and data-centre pipeline

ICICI Securities identifies two megatrends behind its call: surging global network demand from data-centre connectivity, which is lifting subsea and terrestrial cable utilisation, and AI-driven enterprise demand spanning inferencing, enterprise intelligence and voice AI agents. Tata Communications is stitching GPU infrastructure, sovereign cloud and Commotion into a unified enterprise AI stack and charges a SaaS-style mix of platform and usage fees.

The B2B-only network spans more than 80,000 route km of terrestrial fibre and 30,000 route km of metro fibre, connecting 118 data centres over routes designed for predictable latency. The order book grew by strong double digits, with a bigger share from network and recurring business. Management reiterated double-digit EBITDA growth for FY27 and expects a stronger second half.

Elsewhere, Campaign Registry (TCR) doubled EBITDA year-on-year to Rs 178 crore at a 64.3% margin, while the voice business kept shrinking, with revenue down 8.8% to Rs 370 crore. Capex was Rs 663 crore, or 9.9% of revenue, mainly on undersea cables and data-centre-to-data-centre links. Net debt rose by about Rs 800 crore to Rs 11,197 crore after the dividend payout. The company has also reached an in-principle settlement with the Canada Revenue Agency on a long-running tax dispute at its Canadian subsidiary; the related contingent liability was Rs 1,660 crore as of March 2026.

Traceroute to Rs 2,130

ICICI Securities kept its estimates unchanged. It values the core business at 12x FY28E EV/EBITDA and the 26% data-centre stake at 15x, then deducts net debt and half of the pending AGR liability. Each hop below moves the valuation one step closer to the target.

On ICICI Securities' estimates, revenue rises to Rs 29,221 crore by FY28E, an 8.5% CAGR, while EBITDA grows faster at 13.8% to Rs 6,249 crore. PAT is projected at Rs 2,258 crore, with EPS of Rs 79.2. RoCE improves to 17.3%, and net debt to EBITDA falls to 1.3x.

Risks, both ways