Buy Tata Communications, target price Rs 1510: ICICI Securities

ICICI Securities has buy call on Tata Communications with a target price of Rs 1510. The current market price of Tata Communications is Rs 1224.9.

Tata Communications, incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 34882.58 Crore) operating in Telecommunications sector.

Tata Communications key Products/Revenue Segments include Telecommunication Services for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 4630.45 Crore, up 1.57 % from last quarter Total Income of Rs 4559.09 Crore and up 2.30 % from last year same quarter Total Income of Rs 4526.55 Crore. Company has reported net profit after tax of Rs 317.35 Crore in latest quarter.

The company’s top management includes Ms.Renuka Ramnath, Mr.Amur S Lakshminarayanan, Mr.Srinath Narasimhan, Mr.N Ganapathy Subramaniam, Mr.Ashok Sinha, Mr.Krishnakumar Natarajan. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2023, the company has a total of 28 Crore shares outstanding.

Investment Rationale
The company has seen significant improvement in its orderbook, particularly in large deals (TCV>US$1mn) and it remains confident of continuing to improve on it in FY24/FY25, to facilitate which it has upfronted investments. The brokerage believes strong revenue growth will eventually drive operating leverage and margin improvement.

Promoter/FII Holdings
Promoters held 58.86 per cent stake in the company as of 31-Mar-2023, while FIIs owned 16.99 per cent, DIIs 14.02 per cent.