Tata Communications (TATACOMM) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue reached INR 6,100 crore, up 6.5% year-over-year, with EBITDA at INR 1,174 crore, growing 3.9% YoY and margin at 19.2%.

• Data revenue grew 7.3% YoY, digital portfolio grew 14.9% YoY, and next-gen connectivity and media segments neared 30% growth.

• PAT for the quarter was INR 183 crore, down 27% YoY, with PAT margin at 3.0%.

• Strategic bets in AI, cloud, and digital fabric are gaining traction, with new product launches and marquee customer wins in India and international markets.

• Launched new Voice AI and Cloud Networking products, secured significant government and enterprise contracts, and won industry awards.

Financial highlights

• Data revenue was INR 5,179 crore, up 7.3% YoY; core connectivity revenue reached INR 2,637 crore.

• Net revenue rose 3.7% sequentially to INR 3,413 crore, with net margin improving by 75 bps to 56%.

• EBITDA margin stood at 19.2%, with data EBITDA margin at 18.6% (up 144 bps sequentially).

• Net debt stood at INR 11,315 crore, with net debt to EBITDA at 2.45x.

• PAT margin decreased by 138 bps YoY to 3.0%; EPS for the quarter was INR 6.42.

Outlook and guidance

• Management expects strategic bets in digital and data services to enhance profitability and margin strength in H2 FY26.

• Strategic bets are expected to contribute at least 10% of incremental digital revenues this year.

• CapEx to sales is projected at 11–12% in the near term, with further GPU investments contingent on utilization.

• Ambition to double business, maintain 20–25% margins, and achieve >25% ROC remains intact, though timelines may shift due to macro factors.

• Focus remains on sustaining growth, optimizing capital efficiency, and delivering long-term value.