Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript. The management discusses maintaining and investing in existing stakes (e.g., 26% stake in STT Data Centres) without indicating new fundraising. Kabir Ahmed Shakir mentioned taking an NCD (Non-Convertible Debenture) of INR 70 crore earlier, but this was presented as an existing position rather than new fundraising. The company focuses on strategic investments in digital and AI Cloud projects but does not specify raising fresh funds via equity or debt. They are guided by internal IRR

Any current/future capex/capital investment/strategic investment?

Tata Communications has made strategic investments including acquiring 1,000 GPUs for its Vayu AI Cloud, with plans to invest more as utilization increases. Current CapEx to sales ratio is around 11%-12%, expected to continue in the near term. The company continues to invest in subsidiaries like STT Data Centre, retaining its 26% stake and making further investments. Investments are guided by IRR thresholds aligned with ambitions of doubling revenue, achieving 23%-25% margins, and above 25% ROCE. Tata Communications is investing in digital business products and strategic bets, focusing on AI,

Future growth expectations in sales/revenue/volumes?

Tata Communications is optimistic about sustaining growth rates in the coming years. Growth is driven by market opportunities across network redesign for distributed data, AI, and workflows. Strategic bets in digital products and AI-enabled services are in early stages but gaining good market traction. The company targets doubling digital revenue and expects strategic bets to contribute at least 10% incremental digital revenues this year. Core Connectivity is growing at low to mid-single digits, bolstered by data center connectivity and AI tailwinds. Order book growth is expected to accelerate

Future growth expectations in earnings/operating earnings/profits/EPS?

Tata Communications is optimistic about sustainable growth driven by digital business and strategic bets such as AI Cloud, Voice AI, and Digital Fabric orchestration. Digital revenue and data portfolios show double-digit growth, expected to accelerate profitability and operating leverage over upcoming quarters. The company anticipates at least 10% contribution from strategic bets to incremental digital revenues this year. Enterprise order book shows double-digit QoQ growth, with robust funnel and 60% digital services contribution, indicating revenue acceleration potential in H2 FY26. M

Current/ Expected Orderbook/ Pending Orders?

The overall order book for Tata Communications is currently flat in the first half of FY26. This flatness is primarily due to a high base effect from a very strong Q1 and Q2 in the previous year. The order booking this quarter is decent, above previous years but lower than Q2 last year. The enterprise segment order book has shown double-digit quarter-on-quarter growth. The service provider segment order book remains somewhat static. The OTT (Over-The-Top) order booking continues to be lumpy. Management is confident about solid order pipelines and a robust funnel with 60% attributable to digita

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Tata Communications LtdQ2 FY25Telecom - Services

Tata Communications Ltd Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹2,042P/E: 43.5Market Cap: ₹47.9K CrSector: Telecom - Services

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

N/A

Order

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Tata Communications is optimistic about sustaining growth rates in the coming years.
→Growth is driven by market opportunities across network redesign for distributed data, AI, and workflows.
→Strategic bets in digital products and AI-enabled services are in early stages but gaining good market traction.
→The company targets doubling digital revenue and expects strategic bets to contribute at least 10% incremental digital revenues this year.
→Core Connectivity is growing at low to mid-single digits, bolstered by data center connectivity and AI tailwinds.
→Order book growth is expected to accelerate in H2 after a flattish first half due to a high base last year.
→International and enterprise segments show robust order booking, with new large deals secured.
→AI Cloud customer traction is strong, with further investments contingent on utilization.
→Overall, Tata Communications maintains its revenue ambitions and is confident about capitalizing on growth opportunities.

Margin guidance

Category 2

→Tata Communications is optimistic about sustainable growth driven by digital business and strategic bets such as AI Cloud, Voice AI, and Digital Fabric orchestration.
→Digital revenue and data portfolios show double-digit growth, expected to accelerate profitability and operating leverage over upcoming quarters.
→The company anticipates at least 10% contribution from strategic bets to incremental digital revenues this year.
→Enterprise order book shows double-digit QoQ growth, with robust funnel and 60% digital services contribution, indicating revenue acceleration potential in H2 FY26.
→Margins may see improvement despite some near-term headwinds (e.g., Red Sea cable cuts, revised TCR comp structure), with focus on margin progression through data EBITDA growth.
→ROCE currently at 15.1% is expected to improve; capex decisions are aligned to hit >25% ROCE over time.
→Management remains committed to profitable growth, aiming to surpass previous margin profiles gradually while scaling new investments.

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Fundraise plans

→There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript.
→The management discusses maintaining and investing in existing stakes (e.g., 26% stake in STT Data Centres) without indicating new fundraising.
→Kabir Ahmed Shakir mentioned taking an NCD (Non-Convertible Debenture) of INR 70 crore earlier, but this was presented as an existing position rather than new fundraising.
→The company focuses on strategic investments in digital and AI Cloud projects but does not specify raising fresh funds via equity or debt.
→They are guided by internal IRR thresholds for CapEx decisions and are balancing investments without signaling recent or upcoming major capital raises.

Order book

→The overall order book for Tata Communications is currently flat in the first half of FY26.
→This flatness is primarily due to a high base effect from a very strong Q1 and Q2 in the previous year.
→The order booking this quarter is decent, above previous years but lower than Q2 last year.
→The enterprise segment order book has shown double-digit quarter-on-quarter growth.
→The service provider segment order book remains somewhat static.
→The OTT (Over-The-Top) order booking continues to be lumpy.
→Management is confident about solid order pipelines and a robust funnel with 60% attributable to digital services.
→They expect an acceleration of order book growth in H2 FY26 due to back-ended revenues from current orders.
→Tata Communications is expanding coverage internationally to further increase order bookings.

Capex plans

Yes

→Tata Communications has made strategic investments including acquiring 1,000 GPUs for its Vayu AI Cloud, with plans to invest more as utilization increases.
→Current CapEx to sales ratio is around 11%-12%, expected to continue in the near term.
→The company continues to invest in subsidiaries like STT Data Centre, retaining its 26% stake and making further investments.
→Investments are guided by IRR thresholds aligned with ambitions of doubling revenue, achieving 23%-25% margins, and above 25% ROCE.
→Tata Communications is investing in digital business products and strategic bets, focusing on AI, software-defined connectivity, programmable voice, RCS, and orchestration layers.
→The company is exploring and exploiting data centre connectivity opportunities domestically and internationally.
→Corporate actions, like land parcel monetization, are ongoing but separate from operational investments.

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