Tata Communications Q4FY26: stock jumps 5% after results

Share jumps despite a subdued market

Tata Communications shares rose more than 5% in intraday trade after the company reported its March 2026 quarter (Q4FY26) results. The stock touched an intraday high of ₹1,604 on the NSE. Around 12:10 PM, it was up 4.2% at ₹1,589 versus the previous close of ₹1,525. The broader market was weaker, with the Nifty50 at 24,223.50, down 154.6 points or 0.63%. Tata Communications’ market capitalisation was reported at ₹45,261 crore. The stock has recovered about 22% from its 52-week low of ₹1,322 recorded on April 2, 2026. The move came as investors digested a quarter where revenue beat expectations, but profit fell sharply.

What stood out in the Q4FY26 numbers

On a consolidated basis, Tata Communications reported net profit of ₹263 crore in Q4FY26. This was down 65.44% from ₹761 crore in the year-ago quarter, with the company attributing the decline to higher costs and one-off impacts. Sequentially, profit fell 28% from ₹364.28 crore in the December 2025 quarter. Revenue from operations in Q4FY26 was ₹6,554 crore, up 9.4% year-on-year from ₹5,990 crore. Operating performance improved, with EBITDA at ₹1,284 crore, up 14.4% from ₹1,122 crore. EBITDA margin rose to 19.6% from 18.7% a year ago, a 90 basis point improvement. The combination of higher revenue and better margins helped support sentiment despite the profit decline.

Full-year FY26 performance: profit down, revenue up

For FY26, Tata Communications reported net profit of ₹1,044 crore, down 35.8% year-on-year. In the same period, revenue increased 7.3% to ₹24,803 crore. The company also highlighted that data revenue crossed the ₹21,000 crore mark on a full-year basis, with 9.4% growth. Separately, it flagged “strong double digit growth in digital revenues” and said digital revenues crossed 50% of the data portfolio for the first time. The company noted increasing customer interest in NextGen connectivity platforms. The board recommended a dividend of ₹17.5 per share.

Segment snapshot: data and digital continue to lead

JM Financial’s note highlighted broad-based growth across the company’s digital portfolio, core connectivity, voice segments and TCR. It pegged consolidated revenue at ₹6,550 crore in Q4FY26, up 5.9% quarter-on-quarter and 9.4% year-on-year, and stated that the performance beat estimates. Data segment revenue was reported at ₹5,684 crore, up 6.1% quarter-on-quarter and 11.5% year-on-year. Within data, digital portfolio revenue was ₹2,901 crore (up 9.4% quarter-on-quarter, 19.2% year-on-year), and core connectivity revenue was ₹2,770 crore (up 2.8% quarter-on-quarter, 4.5% year-on-year). These segment trends matter because the market narrative around Tata Communications has increasingly centred on digital growth alongside its legacy connectivity business.

Costs, margins, and why profit still fell

Even with EBITDA growth, net profit weakened sharply in Q4FY26, which the company linked to higher costs and one-off impacts. JM Financial said EBITDA of ₹1,284 crore was only marginally ahead of estimates due to higher network and operating costs, even as margins were 19.6% for the quarter. The divergence between EBITDA expansion and profit contraction is important for investors assessing near-term earnings quality. It also shows why commentary around costs and exceptional items can move the stock as much as revenue growth. In earlier-year comparisons referenced in the provided material, Q4FY25 profit had benefited from one-off gains, including ₹577 crore from a Chennai land parcel sale and ₹311 crore from selling the stake in Tata Communications Payments Solutions. Against that base, the year-on-year profit drop in Q4FY26 appears starker.

JM Financial’s view: Buy stays, target reiterated

JM Financial maintained a ‘Buy’ rating on Tata Communications and cited strong growth across segments. In the main brokerage summary, it kept an unchanged target price of ₹1,980, valuing the stock at 10x FY28 EV/EBITDA for the data segment. It also projected EBITDA growth of around 20% CAGR over FY26-29E, supported by digital demand and margin improvement. The brokerage note added that net debt declined sequentially to ₹9,400 crore, while capex moderated. Separately, other JM Financial commentary included in the supplied text referenced target prices of ₹2,000, ₹2,030, and a revised target of ₹2,250 in different contexts, while continuing to reiterate a Buy stance. Investors typically track which valuation multiple is being applied to the data segment and how quickly margins normalise when costs rise.

Key numbers at a glance

Market impact: what investors reacted to

The stock’s move suggests the market focused more on revenue momentum and operating margin improvement than the profit decline. The broader market was down, so the outperformance stood out. Growth in the data segment, and particularly the digital portfolio, was a central part of the narrative in both the company’s highlights and JM Financial’s note. The recovery from the April 2026 52-week low also indicates improved sentiment after a weak period for the stock. At the same time, the sharp year-on-year profit fall keeps attention on cost control and the role of one-offs in reported earnings.

Analysis: why the quarter matters

Q4FY26 reinforced the view that Tata Communications is leaning on data and digital-led growth to drive topline expansion. But it also showed that higher network and operating costs can limit how much of that growth flows through to bottom-line profit in a given quarter. Brokerage valuation frameworks in the supplied text repeatedly anchor on EV/EBITDA multiples for the data segment, underlining how margin trajectory influences targets. The company’s dividend recommendation of ₹17.5 per share and comments on a strengthened balance sheet added to the positives highlighted in the result communication. For investors, the key watchpoints remain the pace of digital portfolio growth, sustainability of EBITDA margins near 20%, and the effect of costs and exceptional items on net profit.

Conclusion

Tata Communications’ Q4FY26 print delivered higher revenue and stronger EBITDA, even as net profit declined sharply due to costs and one-off impacts. The stock rose over 5% intraday, and JM Financial reiterated a Buy view with a stated target of ₹1,980 in the main note cited. The company’s commentary around digital growth, NextGen connectivity interest, and a ₹17.5 per share dividend recommendation will remain in focus as markets track follow-through in margins and cash flows.