Tata Communications has announced a revision in its financial targets and reported mixed Q1 results, while also making a significant move in the debt market.

Delayed EBITDA Margin Target

Tata Communications has adjusted its timeline for achieving a 23-25% EBITDA margin, pushing the target from FY27 to FY28. CFO Kabir Ahmed Shakir stated that this represents a delay of four to five quarters. Additionally, the company's ambitious revenue target of ₹28,000 crore by FY27 may also face a deferral.

Q1 Performance

The company reported a mixed bag of results for the first quarter:

Despite the decline in EBITDA margin and profit after tax, Tata Communications has shown resilience in its data business segment.

Growth Trajectory and Future Outlook

The CFO highlighted the company's transition from low single-digit growth five years ago to consistent double-digit growth currently. Looking ahead, expectations are high for the digital portfolio, which is projected to contribute 25-30% growth.

Tata Communications reported a healthy order book in Q1, with the financial impact expected to materialize from Q3 onwards. This suggests potential for improved performance in the latter half of the fiscal year.

Commercial Paper Issuance

In a separate development, Tata Communications has issued commercial paper amounting to ₹500 crore. The key details of this issuance are:

• Issue Date: July 17, 2025
• Redemption Date: October 16, 2025
• Face Value per security: ₹5,00,000
• Discount Rate: 5.90% p.a.
• ISIN: INE151A14180

The commercial paper has been listed on the National Stock Exchange of India Limited as of July 18, 2025.

Market Response

Investors responded positively to these developments, with Tata Communications' shares trading 1.87% higher at ₹1,764.00 on the day of the announcement.

Investor Communication

Tata Communications continues to maintain transparency with its investors. The company has made available the recording of its earnings call for Q1 FY26 results on its official website, allowing stakeholders to gain deeper insights into the company's performance and strategy.

As Tata Communications navigates through these strategic shifts and market challenges, stakeholders will be keenly watching how the company adapts to achieve its revised targets and capitalize on the growth in its digital portfolio.

Tata Communications , a leading global communications technology company, has announced its financial results for the first quarter ended June 30.

Key Highlights

• Consolidated revenues increased 6.6% year-over-year to ₹5,960.00 crore
• Data revenue grew 9.4% YoY to ₹5,130.00 crore, driven by the company's digital fabric offerings
• EBITDA margin improved to 19.1%, up 30 basis points
• Profit after tax (PAT) stood at ₹232.00 crore, down 34.9% YoY

Financial Performance

Tata Communications delivered a stable performance in Q1 despite ongoing macroeconomic headwinds. The company's data services segment continued to be the key growth driver, with revenues rising 9.4% compared to the same period last year.

While EBITDA remained flat at ₹1,137.00 crore, the EBITDA margin saw a slight improvement to 19.1%. However, profit after tax declined 34.9% year-over-year to ₹232.00 crore.

Management Commentary

A.S. Lakshminarayanan, MD and CEO of Tata Communications, commented on the results: "Despite ongoing macroeconomic headwinds and continued pressures across the industry, we delivered a stable performance this quarter — with a healthy double-digit growth in our order book and modest uptick in margins. Our digital fabric is becoming deeply embedded in our enterprise customers' operations — simplifying complex infrastructure and delivering exactly what they need, on their terms."

Kabir Ahmed Shakir, Chief Financial Officer, added: "Our digital fabric continues to deliver, and we are pleased to report an all-round performance across our portfolio. We added multiple million dollar deals this quarter to our order book. We are encouraged by the losses narrowing in our digital portfolio."

Business Highlights

The company highlighted several achievements during the quarter:

• Unveiled a new cable system to enhance next-generation global connectivity
• Recognized as a leader for the 12th consecutive year in the Gartner Magic Quadrant
• Received multiple awards for its digital fabric solutions, including recognition for its SafePass® 3.0 solution as the Industrial IoT Product of the Year

Tata Communications continues to focus on expanding its digital portfolio and strengthening its position in global markets. The company's emphasis on its digital fabric offerings appears to be paying off, as evidenced by the strong growth in data services revenue.

As Tata Communications navigates the challenging macroeconomic environment, it remains committed to delivering innovative solutions and driving digital transformation for its enterprise customers worldwide.