Improving revenue growth trajectory key for Tata Communications stock

Street will also keep an eye on margins as marketing costs start to impact profitability

The Tata Communications (TCom) stock slipped 7 per cent on Wednesday after its December quarter performance missed the Street’s expectations. Besides the Q3 showing, what may have added to the stock’s decline is the government’s decision to sell its 26 per cent stake in the company in the current financial year through the offer for sale and strategic sale routes. Moreover, with the stock rising 350 per cent since the start of FY21, expectations were high resulting in a correction on a miss on the performance front.

While revenues fell 4 per cent, its operating profit declined 10 per cent on