Tata Elxsi, the 36-year-old Tata Group-backed IT stock, witnessed massive buying sentiment on Thursday, January 9, ahead of its Q3 results. The midcap stock jumped as much as 2.2% with an intraday high of Rs 6617.05 apiece on BSE. Tata Elxsi is expected to report mild gains in revenue and margins in the December 2024 quarter.
Tata Elxsi Share Price:
At the time of writing, Tata Elxsi's share price traded at Rs 6606.45 apiece on BSE, with a market cap of Rs 41,147.18 crore. The stock traded near its day's high of Rs 6617.05 apiece.
The stock's 52-week high and low is at Rs 9,082.90 apiece, and Rs 6,285.05 apiece respectively. Its price-to-equity ratio is at 49.35x, while its return on equity is at 32.85%.
Tata Elxsi Q3 Results Preview:
Kotak Institutional Equities has forecasted revenue growth of 0.5% c/c qoq driven by an uptick in healthcare & medical devices and expects muted trends in the transportation vertical and media & communications. Transportation would be impacted by furloughs and moderating spending growth at top clients. Media clients remain cautious on incremental spending but some improvement in EM telecom clients would offset the weakness in media.
Also, its EBIT margins are seen to expand by 20 bps qoq aided by marginal improvement in utilization.
Key focus areas for investors in Tata Elxsi's Q3 results are --- (1) overall demand outlook in the SDS segment; (2) commentary on engagements with clients other than JLR in transportation; (3) outlook on R&D spending by automotive clients in CY2025; (4) outlook of media & communications vertical; (5) outlook on engagements with large clients in healthcare & medical devices vertical; (6) progress on scale-up of adjacencies in each of the three focus verticals.
BUY Tata Elxsi Shares?
Kotak recommended selling on Tata Elxsi with a target price of Rs 6,886. While HDFC Securities suggested REDUCE on the IT stock for a target price of Rs 6,865.
About Tata Elxsi:
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. Today, 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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