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Tata Communications shares surged 10% on Friday, on a sentiment boost after India’s largest IT services provider, Tata Consultancy Services (TCS) outlined plans for AI dominance.
The IT behemoth is planning to develop a 1 gigawatt AI-driven data capacity centre over the next five to seven years. The capex will be around $1 bn for every 150 megawatts, with a total outlay of over $6.4 bn, which will be funded through a mix of debt and equity. TCS will be keeping the data center business separate and all the data and computing will be hosted in India itself.
Analysts at Nirmal Bang highlighted that TCS chose this business as it creates a synergy with existing hyperscalers and AI-native companies who would be using this data center for their India requirements. Apart from this, there will also be a unique synergy with the rest of the Tata Group companies.
Market buzz indicates that Tata Communications could be a strong beneficiary of this move, with its existing data connectivity and cloud infrastructure network. TCS could leverage its extensive land bank for building these large-scale data centers in India, offering potential monetisation of surplus land.
Tata Communications recently announced the launch of its Voice AI platform, powered by Agentic AI. It would be used to improve BFSI customer engagement with multilingual support (40+ languages).
It will be reporting its September quarter earnings (Q2 FY26) on October 15.
What Is The Retail Mood?
Data on Stocktwits shows that retail sentiment moved to ‘neutral’ a day earlier. It was ‘bearish’ last week.
Tata Communications shares have risen 9% year-to-date (YTD).
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