Tata Communications

TATACOMM (₹1,704.90) exhibits a mixed technical posture as of 2026-11-06, characterized by weak daily momentum conflicting with a bullish monthly trend. On the daily chart, the price trades below the 20-period EMA and Supertrend, signaling short-term bearish pressure, yet remains above the 20-period SMA and 200-period SMA, providing structural support. The ADX of 17.38 indicates weak trend conviction, suggesting the current move lacks strong directional force.

Price positioning is neutral-to-low within recent ranges, sitting +38.3% above the 20-day low and near the midpoint of the 252-day range (+48.6%). Immediate resistance lies at ₹1,729.23 (1.43% above), while support is anchored at ₹1,684.47 (1.20% below). Volatility is elevated, with annualized volatility at +31.3% and an ATR of 3.37%, implying wider intraday swings. Recent candlestick formations, including an Evening Star and Bearish Engulfing pattern on 2026-11-05, highlight short-term selling interest, though these are not currently active signals.

The broader context shows divergence: the monthly timeframe remains bullish with price above all key moving averages and the Supertrend, whereas the weekly structure is bearish relative to moving averages but holds a bullish Supertrend. This suggests the stock is in a consolidation phase within a longer-term uptrend. Key monitoring levels include the ₹1,729 pivot for upside confirmation and the ₹1,684 floor for downside risk.

On November 2, 2026, Tata Communications and its co-shareholders KKR and Singtel initiated a dual-track process to sell their stakes in STT Global Data Centres India Private Ltd (STT GDC India). The transaction targets a valuation exceeding $5.5 billion for the data centre platform, which operates 34 facilities across 10 locations with a total capacity of 613 MW. This sale is part of a broader strategy to rebalance capital requirements for the global STT Group and allows Tata Communications to streamline its domestic expansion plans through partnerships with TPG and TCS. An earlier plan to list STT GDC India via an Indian IPO remains under evaluation as part of this dual-track initiative.

In separate market commentary on the same date, SEBI-registered analysts from Choice Equity Broking and Bonanza Portfolio highlighted Tata Communications among five stocks with technical setups suggesting potential upward movements, citing better-than-estimated Q2 earnings and improving macro indicators such as passenger vehicle sales and GST collections. These views are attributed to external analysts and do not constitute factual corporate developments.

Tata Communications disclosed two material developments in late October 2026. First, the company announced a strategic capacity expansion for India’s AI infrastructure, planning to add approximately 6 Pbps of network capacity between FY 2030 and FY 2036 at an estimated cost of ₹4,350 crores (~US$400-450 million), funded through operating cash flows. This investment targets current utilization levels of ~70%–80% against an existing 1.25 Pbps capacity. Second, the company completed an intra-group restructuring effective October 31, 2026, merging Kaleyra, Inc. into its subsidiary Kaleyra US Inc. to simplify operations, with no change in ultimate beneficial ownership or expected material financial impact. Additionally, Tata Communications clarified that there is no material event regarding media reports of STT GDC India being put up for sale, stating it regularly evaluates strategic opportunities but does not comment on unverified speculation.

Tata Communications demonstrates a strengthening operational trajectory in Q2 FY2026-27, marked by sequential revenue growth and significant margin expansion. Revenue from operations rose to ₹6,687.89 crore, up from ₹6,582.82 crore in Q1, while expenses decreased sequentially to ₹6,204.86 crore. This leverage drove Profit Before Tax (PBT) to ₹462.90 crore, nearly doubling the Q1 figure of ₹211.38 crore, with Net Profit climbing sharply to ₹335.61 crore from ₹129.72 crore. The TTM net profit stands at ₹1,089 crore against sales of ₹26,014 crore.

Earnings quality appears robust, supported by improving cash conversion; CFO/EBITDA reached 108% for Mar 2026, indicating strong operating cash generation relative to profits. However, balance-sheet dynamics show rising borrowings, which increased to ₹13,369 crore as of Sep 2026 from ₹12,249 crore in Mar 2026. Interest costs also ticked up to ₹197.91 crore in Q2 FY2026-27. While Return on Equity has moderated from historical highs (74% over 5 years to 33% last year), the company’s asset base expanded, with total assets reaching ₹29,010.66 crore as of Sep 2026, driven largely by an increase in Property, Plant, and Equipment to ₹9,365.07 crore. Institutional ownership shifted slightly, with DIIs increasing their stake to 20.21% while FIIs held 13.55%.

The critical checkpoint is whether the recent surge in profitability can be sustained as interest costs remain elevated and capital expenditure continues to grow, particularly given the rise in borrowings and goodwill to ₹2,493.81 crore.

Tata Communications presents a conditional upside case anchored in the potential monetization of its data centre assets and structural technical support on longer timeframes. The company is part of a dual-track process to sell STT Global Data Centres India, targeting a valuation exceeding $5.5 billion. This strategic move aims to rebalance capital requirements for the global group while allowing Tata Communications to streamline expansion through partnerships with TPG and TCS. From a market structure perspective, while the daily trend is bearish with a current drawdown of -17.3%, the monthly and weekly trends remain bullish. The stock closed at ₹1,704.9 on November 6, 2026, with resistance levels identified at ₹1,729.23 (1.43% above) and ₹1,758.47 (3.14% above). A constructive interpretation relies on the successful execution of the asset sale or IPO, which could unlock value and improve capital efficiency, alongside the resilience shown by the monthly bullish signal despite near-term volatility.

Tata Communications faces near-term technical weakness and significant capital allocation uncertainty. On a daily basis, the stock is trading below its 20-day exponential moving average with a bearish super-trend signal, indicating short-term downward pressure. The share price has declined 7.4% over the past year and is down 5.9% year-to-date as of November 6, 2026, while currently sitting in a 17.3% drawdown from recent highs. Although the monthly trend remains bullish, the divergence between short-term bearishness and longer-term positioning highlights volatility. Concurrently, the company is part of a dual-track process to sell STT Global Data Centres India at a valuation exceeding $5.5 billion. This strategic move aims to rebalance global capital requirements but introduces execution risk and potential dilution or liquidity shifts associated with the sale and potential IPO of the data centre arm.