Tata Communications sees sharp Q2 margin improvement

Tata Communications Limited (NSE: TATACOMM) reported Q2 FY27 revenue of ₹6,687.9 crore, up 9.6% YoY. Net profit rose 86.3% to ₹341 crore, while EBITDA increased 21.2% to ₹1,422 crore. Key details • Revenue: ₹6,687.9 crore, up 9.6% YoY. • Net profit: ₹341 crore, up 86.3% YoY. • EBITDA: ₹1,422 crore, up about 21% YoY. • EBITDA margin improved to 21.3% from around 19.2% a year ago. • Digital platform revenue grew 18.6% YoY, while data revenue increased 12.2%. My view The strongest part of the quarter is the operating improvement. EBITDA grew more than twice as fast as revenue, while margins expanded by roughly 200 basis points. Digital platform growth at 18.6% is also important because Tata Communications has been trying to move toward higher-value digital services rather than depending only on traditional connectivity. What I’m watching next I will watch digital revenue growth, further margin improvement and whether the company can sustain double-digit data revenue growth over the next few quarters. Stance: Positive on profitability and digital growth. Sustaining the improved margin profile is the key factor to track. Disclosure: I do not have any holding or position in the stock mentioned above.