1:1 Bonus, 24 Dividends: Prabhudas Recommends Buy On Tata Group's IT Stock; Target Set For Rs 8,900-9,000

There is a potential upside seen in Tata Group-backed IT stock, Tata Elxsi. Being a midcap, this stock is currently trading a little over Rs 7,660 apiece. The highest target set by Prabhudas Lilladher is between Rs 8,900 to Rs 9,000. Technical indicators of Tata Elxsi look healthy and hint at an upside in the coming days.

On BSE, Tata Elxsi's share price currently stood at Rs 7,663.85 per share with a market cap of Rs 47,727.73 crore. The midcap has touched a 52-week high and low of Rs 9,191.10 and Rs 5,883.05 respectively.

In the trading week from March 18th to 23rd, Tata Elxsi shares are down nearly a per cent. YTD, the stock is lower by 12.28%. However, its year-on-year performance is healthy with an upside of over 27% on BSE.

In the latest recommendation, Vaishali Parekh, Vice President - of Technical Research, at Prabhudas Lilladher said, "The stock has been in the consolidation phase for some time between the 7400 and 7900 levels, with good support maintained near the 7350 zone."

Parekh pointed out that currently, hovering around the important 200 period MA of 7760, there is tough resistance near the 50EMA zone of 7840 which needs to be breached decisively for confirmation of further upward move.

Also, Parekh said, "The RSI is well placed and is on the rise, with potential to rise further in the coming days. We suggest buying and accumulating this stock for an upside target of 8600-9000, keeping the stop loss near the 7200 level."

Tata Elxsi's Corporate Affairs:

As of now, Tata Elxsi is among the expensive stocks of Tata Group on a per-share basis. The stock has never carried stock splits up to date.

However, in 2017, Tata Elxs rewarded its investors with a bonus issue in the ratio of 1:1 in September of that year.

Meanwhile, in the last 12 months, Tata Elxsi has delivered hefty dividends up to Rs 60.60 per share. And it currently has a dividend yield of 0.8%. As per Trendlyne data, Tata Elxsi has paid up to 24 dividends since June 21, 2001.

Tata Elxsi's Earnings:

During Q3FY24, Tata Elxsi registered a net profit of Rs 206.4 crore in Q3FY24, registering a growth of 3.2% QoQ and 6% YoY. While revenue from operations stood at Rs 914.2 crore, up by 3.7% QoQ and 11.8% YoY.

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.

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.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.