Tata Comm hits record EBITDA, margin expands to 21.3%; consolidated PAT rebounds 83% YoY
PAT +83.18% YoY · revenue +9.64% · margins expanding · beat vs street
₹6,687.89 Cr
+9.64% YoY
₹335.61 Cr
+83.18% YoY
5.01%
+2pp YoY
₹11.96
Tata Communications' consolidated (primary basis) results for the quarter ended September 30, 2026 show revenue of ₹6,687.89 Cr, up 9.6% YoY and 1.6% QoQ, with consolidated PAT of ₹335.61 Cr, up 83.2% YoY (management's own parent-attributable PAT of ₹341 Cr is up 86.2% YoY). The YoY base is soft — Q2 FY26 PAT had itself fallen 27% YoY to ₹183 Cr — so part of the jump is a low-base effect, but the margin expansion underneath it is real: consolidated EBITDA of ₹1,422 Cr (+21.2% YoY) is a record for the company, with EBITDA margin up 202bps to 21.3% from 19.2%, and net profit margin up to roughly 5.0-5.1% from 3.0%.
Q2 FY-2027 vs prior quarters
The margin bridge sits mainly in the Data Services segment (₹5,810.99 Cr revenue, the bulk of the group) and specifically the digital portfolio, which grew revenue 18.6% YoY to ₹3,016 Cr while halving its losses sequentially to a -3.6% EBITDA margin — still loss-making but moving toward the breakeven management has guided to. A ₹36.54 Cr staff-cost-optimisation exceptional charge trimmed this quarter's profit (vs a ₹21.00 Cr net exceptional expense a year ago), but adjusting for both leaves YoY PAT growth near-identical (~83.6%), confirming the improvement is operational rather than one-off driven. Standalone results tell a different story: standalone PAT fell ~40% YoY to ₹125.86 Cr (vs ₹210.94 Cr), reflecting lower other-income/un-allocable items at the parent entity rather than any deterioration in the underlying India business — readers should not read the standalone decline as contradicting the consolidated growth.
The stock went into the print at ₹1,751.7, up 0.3% over the past month of trading.
For context: this is the second-highest quarterly PAT of the last 6 quarters; revenue is at a 6-quarter high.
Overall revenue growth momentum is expected to continue, particularly from the digital portfolio, with strategic bets being commercialized over the next few months. Management aims for EBITDA margins of 23-25%, anticipating operating leverage from improving data growth, and expects ROCE to gradually recover. The digita
— This quarter: met
On guidance, management's prior concall aim of 23-25% EBITDA margins is being approached but not yet reached (21.3% this quarter), so the direction is on-track even though the absolute target band hasn't been hit; the digital portfolio's path to breakeven is similarly progressing (losses halved QoQ) without yet crossing into profit. Our pre-result preview had flagged a profit/margin rebound as the central Street debate after Q1's profit dip, expecting gross revenue of ~₹6,800 Cr; actual revenue of ₹6,688 Cr came in slightly light of that, but the EBITDA/PAT rebound — the metric the Street was actually watching — beat the bar, with management explicitly calling this a 'stellar second quarter' and citing its 'Unified AI Stack' and DC-to-DC connectivity demand as structural growth drivers. The quarter's other context includes a ₹7,513.71 Cr contingent liability disclosed against DOT 'Show Cause-cum Demand Notices' spanning FY2005-06 to FY2024-25 (AGR-related, being contested), a separate tax appeal win for AY2011-12, two commercial paper issuances (₹550 Cr and ₹400 Cr) for working-capital/debt management, and a Company Secretary change effective November 1 — none of which affected this quarter's P&L but are part of the company's ongoing risk and funding profile.
W1
EBITDA margin trajectory toward management's 23-25% aim — currently 21.3%, up from 19.2% YoY but still short of the band.
W2
Digital portfolio's path to EBITDA breakeven — losses halved QoQ to a -3.6% margin this quarter; next checkpoint is turning EBITDA-positive.
W3
Resolution of the ₹7,513.71 Cr DOT demand-notice contingent liability and related AGR litigation pending at the Supreme Court/TDSAT.
Clean digital filing, all figures cross-check against the company's own press release. Consolidated PAT (335.61) is the group total incl. non-controlling interest (consistent with the prior-quarter DB basis); 'attributable to equity holders of parent' is 341.03, which is what EPS is based on and what management's own 86.2% YoY PAT growth claim uses. Tax = current tax 167.31 less deferred-tax benefit 43.27; PAT also nets a 3.25 Cr post-tax share-of-associates loss. Exceptional item this quarter: 36.54 Cr staff-cost optimisation charge (vs 21.00 Cr net exceptional expense a year ago) — adjusted YoY PAT growth (~83.6%) is almost identical to reported (~83.2%), so the one-off isn't distorting the growth story. Standalone PAT fell ~40% YoY even as consolidated PAT rose ~83% YoY — a material basis divergence driven by subsidiary dividend/interest timing in 'other un-allocable income', not the group's operating trend.
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