Fact based stock research
Tata Communications (NSEI:TATACOMM)

INE151A01013

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Tata Communications stock research in summary

tatacommunications.com

ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Tata Communications (Integrated Telecommunication, India) shares have lower financial characteristics compared with similar stocks. Shares of Tata Communications are low in value (priced high) with a consolidated Value Rank of 7 (worse than 93% of alternatives), and are riskily financed (Safety Rank of 22, which means above-average debt burdens) but show above-average growth (Growth Rank of 81). ...read more

RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Tata Communications's financial characteristics. As the company Tata Communications shows low value with an Obermatt Value Rank of 7 (93% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 81% of comparable companies (Obermatt Growth Rank is 81). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 22 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Tata Communications, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	7
Growth Rank	81
Safety Rank	22
Combined Rank	12

Country	India
Industry	Integrated Telecommunication
Index	Good Governace Growth Markets, Independent Boards Growth Markets, R/E Growth Markets, Telecommunications
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Tata Communications

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	14	5	4	7
GROWTH
GROWTH	19	47	59	81
SAFETY
SAFETY	31	26	39	22
SENTIMENT
SENTIMENT	n/a	91	50	^new
360° VIEW
360° VIEW	n/a	29	20	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Tata Communications is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	14	5	4	7
GROWTH
GROWTH	19	47	59	81
SAFETY
SAFETY	31	26	39	22
COMBINED
COMBINED	24	10	14	12

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Tata Communications the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 7 (worse than 93% compared with alternatives), Tata Communications shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Tata Communications. Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Tata Communications's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 1, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Tata Communications. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 16 and Dividend Yield, which is lower than 82% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a sell recommendation based on Tata Communications's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Tata Communications? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Tata Communications? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Tata Communications may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	29	40	31	34
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	37	25	20	16
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	3	1	1
DIVIDEND YIELD
DIVIDEND YIELD	33	25	21	18
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	14	5	4	7

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Tata Communications; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, Tata Communications shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Tata Communications. Sales Growth has a rank of 89 which means that currently, professionals expect the company to grow more than 89% of its competitors. Capital Growth is also above 40% of competitors with a rank of 92. But Profit Growth only has a rank of 40, which means that currently professionals expect the company to grow its profits less than 60% of its competitors. And Stock Returns have also been below average with a rank of only 43. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	3	54	94	89
PROFIT GROWTH
PROFIT GROWTH	n/a	41	23	40
CAPITAL GROWTH
CAPITAL GROWTH	n/a	15	11	92
STOCK RETURNS
STOCK RETURNS	67	79	73	43
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	19	47	59	81

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Tata Communications.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Tata Communications has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Tata Communications is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Tata Communications. Liquidity is at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 31, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 69% of its competitors. Leverage is also high at a rank of 4, which means that the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Tata Communications has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	51	1	4	4
REFINANCING
REFINANCING	28	35	41	31
LIQUIDITY
LIQUIDITY	35	65	67	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	31	26	39	22

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Tata Communications and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	85	7	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	91	65	^new
MARKET PULSE
MARKET PULSE	n/a	42	77	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	91	50	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Tata Communications.
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