Tata Communications Gains 5% on Macquarie Call; Stock May Double in 3 Years

Mumbai, July 2, 2025 – Shares of Tata Communications surged nearly 5% on Wednesday after global brokerage Macquarie initiated coverage with an ‘Outperform’ rating and a bullish price target of ₹2,300 per share. The stock was last seen trading at ₹1,811 on the NSE, reflecting heightened investor enthusiasm following the report. Macquarie’s note emphasized the company’s strategic positioning in global digital infrastructure and enterprise transformation services. It stated that under a bullish scenario, Tata Communications’ stock has the potential to double over the next three years, buoyed by expansion in digital solutions and consistent scale in core network capabilities.

Highlights

• Stock rose nearly 5% to ₹1,811 following Macquarie’s note.

• Coverage initiated with an ‘Outperform’ rating and ₹2,300 target price.

• Brokerage sees potential for 100% upside in three years under bullish case.

• Tata Communications positioned as a digital infrastructure enabler globally.

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ROIC Set to Recover Strongly Post Digital Expansion, Says Macquarie

In its detailed coverage, Macquarie flagged a short-term drop in Tata Communications’ return on invested capital (ROIC), which declined from an average of 16% in FY21–FY23 to approximately 11% in FY25. The fall, attributed to recent digital acquisitions, is expected to reverse steadily, with ROIC forecast to exceed 20% by FY28. The brokerage noted that Tata Communications is executing a long-term pivot toward higher-margin digital services, where it is already ranked in the industry ‘Leaders’ quadrant. Analysts believe this shift, combined with scale efficiencies, will push the company closer to its internal ROIC target of 25%, significantly improving long-term investor value.

Highlights

• ROIC fell to ~11% in FY25 due to digital acquisitions.

• Macquarie projects ROIC to surpass 20% by FY28.

• Digital pivot seen as key to long-term margin expansion.

• Internal target of 25% ROIC remains intact as strategic goal.