Tata Communications (TATACOMM) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue reached INR 5,960 crores, up 6.6% YoY, with data revenue up 9.4% to INR 5,130 crores and digital revenues rising 17.4% YoY, despite macroeconomic and SAARC region challenges.

• EBITDA was INR 1,137 crores, up 1.3% QoQ, with a margin of 19.1%, improving 30 bps sequentially but down 125 bps YoY.

• PAT declined 34.9% YoY to INR 232 crores, with PAT margin at 3.9% versus 6.4% in the prior year.

• All digital fabric business components posted double-digit YoY growth, and the order book saw healthy expansion.

Financial highlights

• Revenue: INR 5,960 crores, down 0.5% QoQ, up 6.6% YoY; Data revenue: INR 5,130 crores, up 0.7% QoQ, up 9.4% YoY; Digital revenue: INR 2,510 crores, up 2.9% QoQ, up 17.4% YoY.

• EBITDA: INR 1,137 crores, up 1.3% QoQ, flat YoY; margin at 19.1%.

• PAT: INR 232 crores (down 34.9% YoY); PAT margin: 3.9% (down 248 bps YoY).

• Net debt: INR 10,124 crores, increased due to working capital effects; Net debt to EBITDA: 2.2x; ROCE: 15.4%.

• FCF: minus INR 621 crores YoY, impacted by capex and absence of prior year tax refunds.

Outlook and guidance

• Management remains confident in achieving low- to mid-single-digit growth in core connectivity, especially in India, and expects continued double-digit digital business growth.

• Focus on profitable expansion, margin improvement, and strategic growth in enterprise services.

• Order book growth and strong funnel provide confidence for sustained revenue momentum.

• Caution expressed regarding macroeconomic and industry headwinds, with ongoing focus on operational efficiency.