Tata Communications (TATACOMM) Q3 25/26 earnings summary

Executive summary

• Board approved appointment of new CEO MD designate, Ganesh Lakshminarayanan, effective April, ensuring leadership continuity.

• Majority stake acquired in Commotion, an AI-native enterprise SaaS platform, to accelerate AI integration and full-stack AI platform ambitions.

• Strong order book with double-digit QoQ and YoY growth, driven by core connectivity and digital portfolio, including a major global subsea build deal.

• PAT nearly doubled sequentially to ₹365 crore, with a PAT margin of 5.9%.

• Digital portfolio revenue up 15% YoY, with several new product launches and customer pilots underway.

Financial highlights

• Q3 FY26 revenues at INR 6,189 crores, up 1.5% QoQ and 6.7% YoY; data revenues grew 3.5% QoQ and 9.3% YoY to ₹5,359 crore.

• EBITDA at INR 1,228 crores, up 4.6% QoQ and 4% YoY; EBITDA margin at 19.8%.

• PAT for Q3 FY26 was ₹365 crore, up 42.3% YoY; PAT margin improved by 148bps to 5.9%.

• Free cash flow at INR 1,050 crores, up 3.9x QoQ, driven by working capital improvement and tax refund.

• Net debt reduced by 11% QoQ to INR 10,080 crores; net debt/EBITDA improved to 2.16x from 2.45x.

Outlook and guidance

• Incremental growth expected from strategic product launches in next-gen connectivity, cloud, and AI platforms.

• Digital portfolio, especially CIS and cloud/security, expected to sustain or accelerate double-digit growth.

• Management highlighted a robust order book and expects continued momentum with upcoming product launches and a focus on data-led growth.

• The company remains confident in its "Fit to Grow" strategy, emphasizing capital efficiency and sustainable expansion.

• MOVE/IoT focus shifting to profitability over growth.