Tata Group-backed 35-year-old midcap tech company, Tata Elxsi is all to declare its second quarterly earnings for FY25, on October 10, alongside Tata Consultancy Services (TCS) earnings as well. In the second quarter, Tata Elxsi's earnings are expected to be a mixed bag. Ahead of the results, brokerage HDFC Securities recommended a REDUCE rating on Tata Elxsi's share price.
Tata Elxsi Q2 Preview:
In its preview note, HDFC Securities said, "Tata Elxsi's performance will be a mixed bag with strong growth in Transportation offset by a decline in Healthcare, but margin tailwinds on the upside from utilisation."
HDFC Securities estimates Tata Elxsi's revenue to come to around Rs 952.99 crore in Q2FY25, registering growth of 8% YoY and 2.8% QoQ. In dollar terms, revenue is seen at $114 million, up by 6.6% YoY and 2.4% QoQ.
Further, the brokerage has factored EBIT of Rs 261 crore in Q2FY25 for Tata Elxsi, which would be a growth of 9.5% YoY and 15.9% QoQ. EBIT margin is expected to expand by 36 bps YoY and 311 bps QoQ to 27.4%.
Adjusted PAT is estimated at Rs 211 crore, up by 5.4% YoY and 14.5% QoQ.
Tata Elxsi Q1 Results:
In Q1FY25, Tata Elxsi earned a net profit of Rs 184.07 crore, declining by 2.53% from Rs 196.93 crore in Q4FY24. Year-on-year, Q1 PAT dipped marginally from a profit of Rs 188.85 crore in Q1FY23.
On the other hand, revenue from operations stood at Rs 926.5 crore in Q1FY25, registering a growth of 2.3% QoQ and 9% YoY. In constant currency, the revenue growth is at 2.4% QoQ.
Meanwhile, operating margins stood at 27.2% in Q1FY25, while net margin came in at 26.3% in the quarter under review.
Tata Elxsi Share Price:
Ahead of earnings, Tata Elxsi's share price ended at Rs 7611.20 apiece, up by 0.81% on BSE, with a market cap of Rs 47,402.26 crore. The stock's 52-week high and low is at Rs 9,191.10 apiece and Rs 6,406.60 apiece respectively.
The price-to-equity ratio is at 60.19x, while the return on equity is at 31.43%. YTD, the stock is down by nearly 13%.
HDFC Securities has recommended REDUCE on Tata Elxsi's share price with a target of Rs 7,120 apiece.
Tata Elxsi commenced its business on 5th May 1989 in Bangalore, the Silicon Valley of India, to develop and promote applications of electronics, embedded systems, and software. The Mission was to foster innovation in the fast-emerging IT market and accelerate the adoption of leading-edge technologies. At present, Tata Elxsi is recognized as a premium engineering service provider worldwide and amongst the leaders in the automotive, media, broadcast, communications, and healthcare industries.
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