This Tata Group stock may double in the next three years, as per Macquarie bull case

Shares of Tata Communications Ltd. are bucking the trend in an otherwise weak market, trading 3% higher to hit a day's high of ₹1,794.

Global brokerage firm Macquarie has initiated coverage on Tata Communications, with an 'Outperform' rating and a price target of ₹2,300 per share.

This target implies a potential upside of over 30% from Tuesday's closing levels.

Macquarie believes the stock could potentially double over the next three years in a bullish scenario. The brokerage said Tata Communications is enabling digital transformation for enterprises by leveraging one of the world's largest digital infrastructure networks.

The brokerage also sees strong upside potential in the company's growing digital services business, where Tata Communications is generally ranked in the "Leaders" quadrant.

However, the company's return on invested capital (ROIC) has declined from an average of 16% during FY21–FY23 to around 11% in FY25 due to recent acquisitions in its digital portfolio. Assuming no further acquisitions, Macquarie expects ROIC to recover and exceed 20% by FY28, moving closer to the company's long-term target of 25%.

Earlier this year, ICICI Securities double upgraded Tata Communications to 'Buy' from its earlier rating of 'Hold'. Alongside this upgrade, the brokerage also raised its price target to ₹1,840.

ICICI Securities said the recent decline in Tata Communications stock has made valuations compelling, and risk-reward favorable.

Of the nine analysts that have coverage on the stock, six of them have a 'Buy' rating, one say 'Hold', while two of them have a 'Sell' recommendation.

Shares of Tata Communications are currently trading 1.87% higher at ₹1,758.10. The stock has risen just 2% so far in 2025.

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