Earnings Beat: Tata Communications Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Investors in Tata Communications Limited (NSE:TATACOMM) had a good week, as its shares rose 5.2% to close at ₹1,743 following the release of its quarterly results. Tata Communications reported ₹67b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹11.94 beat expectations, being 5.7% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Tata Communications from ten analysts is for revenues of ₹271.1b in 2027. If met, it would imply a satisfactory 4.2% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 42% to ₹54.93. Before this earnings report, the analysts had been forecasting revenues of ₹271.0b and earnings per share (EPS) of ₹54.86 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Check out our latest analysis for Tata Communications
The analysts reconfirmed their price target of ₹2,129, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Tata Communications analyst has a price target of ₹2,600 per share, while the most pessimistic values it at ₹1,850. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tata Communications' past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 8.6% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.9% per year. So although Tata Communications is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at ₹2,129, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tata Communications analysts - going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Tata Communications that you need to take into consideration.
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