Tata Communications Q2 Profit Jumps 86% to ₹3,410 Crore

Tata Communications Ltd has bagged an 86.2% increase in consolidated net profits at ₹3,410 crore in the September quarter of FY27 as against ₹1,830 crore in the same quarter last year. The company, which is under the Tata Group, released its second-quarter earnings on October 15.

Consolidated revenue rose 9.6% to ₹6,688 crore from ₹6,100 crore in the year-ago period. EBITDA grew 21.2% to ₹1,422 crore, while the EBITDA margin widened by about 202 basis points to 21.3% from 19.2%.

The profit figure came in ahead of market estimates of about ₹3,300 crore, according to ScanX. The sharp gap between operating growth and bottom-line growth suggests below-EBITDA items contributed significantly to the quarter’s profit, though the published coverage did not detail them.

Data and digital businesses lead growth

Data business generated revenues of ₹5,810 Cr in the quarter, growing 12.2% YoY. It remains the primary driver of revenue for the company. Digital businesses saw higher growth of 18.6% and clocked in at ₹3,016 Cr.

Digital Portfolio has seen its losses reduce over time. The business reported an absolute loss of ₹107 Cr, with margin coming in at -3.6% as compared to -6.9% in June quarter and -9.7% in FY25. The company believes it will be able to achieve break-even soon.

Management attributed the margin expansion to operational discipline, with costs growing slower than revenue. The company also highlighted demand for sovereign AI infrastructure and for secure data residency services among enterprises that face tighter compliance requirements.

Board decisions and leadership change

The board approved the transfer of its entire stake in Kaleyra Inc. to its subsidiary Tata Communications (Netherlands) B.V. The intra-group transaction is valued at $92.625 million.

The company also named Ridhi Sood as Company Secretary and Compliance Officer with effect from November 1, 2026. She succeeds Zubin Adil Patel.

Market reaction

Tata Communications shares jumped by 6.32% closing at 1763.70 on 15th October after reporting better than expected results with higher margins. The stock is returning negative returns of approximately 5.8% since last year.

A steady improvement in profitability has been a key demand from investors, who have tracked the company’s heavy investment in digital platforms over the past few years.

What comes next

Investors will look for evidence that the Digital Portfolio can reach breakeven in the coming quarters and that data revenue growth can stay in double digits. The pace of enterprise adoption of AI infrastructure and cloud connectivity services will be central to sustaining margin gains through the rest of FY27.