Tata Communications Ltd.
ISIN: INE151A01013 • Market Cap: ₹47,330 Cr
The 5-Pillar Quality Audit for Tata Communications Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (19.3%), Return on Capital Employed (17.0%), and equity compounding (29.1%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 3.14 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (7.0%) and 3Y PAT CAGR (-2.2%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 50.04 vs PEG of 1.81 and Dividend Yield of 1.1%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 58.9%, backed by 33.6% institutional ownership.
Key Fundamental Strengths
Robust Equity Compounding (ROE: 29.1%)
Shareholder equity compounds at a healthy 29.1%, exceeding average Indian equity benchmarks.
Deep Institutional Sponsorship (33.6%)
Mutual funds, domestic DIIs, and foreign FIIs hold 33.6%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Elevated Financial Gearing (D/E: 3.14)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Sectoral & Macro Headwinds (Telecommunication)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Telecommunication space.
Quantitative Strategy Eligibility
Checking TATACOMM against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 59/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Telecommunication Sector Peer Comparison
Compare TATACOMM directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Tata Communications Ltd. (TATACOMM)Current | 59/100 | ₹47,330 Cr | 50.04 | 17.0% | 3.14 | — |
| Vodafone Idea Ltd. (IDEA) | 65/100 | ₹1.52 Lakh Cr | 4.07 | -1.7% | -4.18 | View |
| Indus Towers Ltd. (INDUSTOWER) | 76/100 | ₹97,876 Cr | 13.68 | 18.4% | 0.02 | View |
| Bharti Hexacom Ltd. (BHARTIHEXA) | 79/100 | ₹79,950 Cr | 43.83 | 23.9% | 0.38 | View |
| HFCL Ltd. (HFCL) | 62/100 | ₹34,668 Cr | 60.55 | 8.6% | 0.37 | View |
| Sterlite Technologies Ltd. (STLTECH) | 62/100 | ₹31,629 Cr | 130.16 | 8.9% | 0.86 | View |
Frequently Asked Questions: Tata Communications Ltd.
Q:What is the 5-Pillar Fundamental Score for Tata Communications Ltd. (TATACOMM)?
Tata Communications Ltd. has a RupeeTools Fundamental Score of 59/100, placing it in the 'Moderate / Average' category. Its pillar scores are: Profitability (85/100), Financial Health (39/100), Growth (35/100), Valuation (57/100), and Ownership Quality (85/100).
Q:Is TATACOMM fundamentally strong for long-term investment?
TATACOMM currently holds a moderate quality rating of 59/100. While it operates in the Telecommunication sector, investors should monitor its debt health before initiating long-term positions.
Q:Does TATACOMM pass the Coffee Can Investing filter?
No. TATACOMM does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does TATACOMM compare against other Telecommunication peers?
Within India's Telecommunication sector, TATACOMM trades at a P/E of 50.04 and generates an ROCE of 17.0%. Compare its 5-Pillar score of 59/100 against top sector peers like Vodafone Idea Ltd. (65/100), Indus Towers Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.