Tata Communications Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that Tata Communications Limited (NSE:TATACOMM) filed its quarterly result this time last week. The early response was not positive, with shares down 4.6% to ₹1,786 in the past week. Revenues of ₹56b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of ₹11.67 an impressive 48% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Tata Communications

Taking into account the latest results, the consensus forecast from Tata Communications' eight analysts is for revenues of ₹237.2b in 2025. This reflects a meaningful 8.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 71% to ₹55.12. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹243.1b and earnings per share (EPS) of ₹52.19 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of ₹1,984, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Tata Communications at ₹2,150 per share, while the most bearish prices it at ₹1,625. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Tata Communications' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tata Communications is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tata Communications following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at ₹1,984, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Tata Communications. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tata Communications going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Tata Communications that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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