- 13 Jun 2024
- ICICI Securities
REITERATES FY28 DATA REVENUE TARGET OF ₹ 28000 CRORE AND EBITDA MARGINS OF 23-25% BY FY27
TATACOMM - 1629 Change: -16.85 (-1.02 %)News: Tata communications, in its analyst meet, reiterated its long-term growth aspirations to reach data revenues of ₹ 28000 crore by FY27, implying a CAGR of ~18% over FY24-27. The revenue growth will be driven by driven by its digital portfolio (at 41% of the data revenues in FY24) which it expects it to increase to 60% of the data revenues by FY26. The major growth heavy lifting will be done through accelerating new business opportunities, expanding acquired portfolio in the CPAAS space, media & communications space as well as leverage its Network, Cloud and security segments. It expects EBITDA margins to improve to 23-25% from 20.2% in FY24, largely driven by operating leverage driving profitability of digital portfolio, acquisition synergy from Switch and Kaleyra.
Views: Tata Communication remains a key beneficiary of overall digitisation at enterprise levels, with new acquisition also adding to its capabilities in the CPaaS and Media space. While revenue growth is likely to continue on the reported basis in FY25, the underlying revenue growth had further tapered to sub 5%, alongwith margin weakness in Q4FY24, which needs to improve.
Impact: Neutral