This Jhunjhunwala stock stares at a strong upmove, time to buy?

Tata Communications stock rose over 5% amid a flat move for the broader indices in early trade today. Tata Communications climbed 5.64% to Rs 1,401 against the previous close of Rs 1326.25 on BSE. Rakesh Jhunjhunwala invested in the company through his wife Rekha Jhunjhunwala. As per the shareholding pattern of Tata Communications for the quarter ended December 2022, Rekha Jhunjhunwala owned 30,75,687 shares or a 1.08 per cent stake in the company.

Tata Communications stock has risen 18.82% in a month and climbed 9.34% in a week after remaining in a consolidation phase of six months.In contrast to the latest upmove, the Tata Group stock had gained 23.15% in a year. During the latest upside move, the stock has given 100 and 200 DMA breakout above Rs 1,280 apiece levels on closing basis.

Pavitraa Shetty, Co-founder & Trainer, Tips2Trades said, "With a recent deal win with regards to Formula 1 as well as a slightly positive sentiment in the overall markets have led Tata Communications to a strong rally since the past few weeks. Technically, the stock looks overbought and investors are advised to book partial profits at current levels and wait for a dip near Rs 1,160 to start initiating new buy positions."

ICICI Securities has assigned a buy call on Tata Communications with a target price of Rs 1,680 for a period of one year. The market price of Tata Communications when the recommendation was given was Rs 1,274.1.

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"Tata Communications is in a sweet spot with corporates looking to significantly invest in upgrading their networks, and adoption of next-gen connectivity. Tata Communications' ability to provide digital services only adds to TAM. The brokerage has cut EBITDA estimates for FY22E / FY23E by 4.7% and 2.4%. It maintains BUY with a revised target price of Rs 1,680 (from Rs1,750 ) as it rolls over valuation to FY24E, but cut EPS multiple to 20x (from 22x)" said ICICI Securities.

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IIFL Securities gave a 12-month target price of Rs 1,600 on February 17 this year. The brokerage saw a 27% upside to the market price of Rs 1,255 at that time.  

"Tata Communications intends to leverage its strong network capabilities in domestic and international markets, and enterprise relationships. The endeavour is to shift more from product to platforms and to raise TCOM's share of IP content (this would take time). It also plays a role in simplification of multi-vendor environments and in improving agility. The pandemic drove remote production and virtual production in the media vertical. The revenue from this vertical has gone back up, to pre-Covid level," IIFL Securities said.

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Tata Communications stock opened with a gain of 2.54% to Rs 1,360 on BSE today. It has lost 7.63% since the beginning of this year.

A total of 1.56 lakh shares of the firm changed hands amounting to a turnover of Rs 21.38 crore. Market cap of the Tata Group company stood at Rs 38,774 crore. The large cap stock hit a 52-week high of Rs 1,590 on January 17, 2022 and a 52-week low of Rs 1,036 on May 26, 2021.

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Tata Communications reported a 27.8 per cent rise in consolidated net profit at Rs 395.21 crore for the third quarter ended December 2021 against net profit of Rs 309.41 crore in the same period a year ago.

The company's total income fell marginally during Q3 to Rs 4,203.69 crore from Rs 4,231.05 crore in the corresponding quarter of 2020-21. Data segment contributed 77.3 per cent to the company total revenue while voice service accounted for 13.2 per cent of Tata Communication's gross revenue.

Meanwhile, Sensex was trading 199 points higher at 59,233 and Nifty rose 90 points to 17,828 in the afternoon session.

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