1:1 Bonus, Rs 70/Dividend: Tata's IT Stock Falls 9% After 34% Surge In 7-Consecutive Session; Kotak Says SELL

Tata Group-backed midcap IT stock, Tata Elxsi share price snapped its seven-consecutive days winning streak on August 28. The stock nosedived by over 9% on Wednesday, after rallying by nea. rly 34% in 7-days surge. The latest selloff comes after brokerage Kotak Institutional Equities recommend SELL on this Tata IT stock.

In its note, Kotak said, "TELX's stock price increased 26% in the past two days. The stock was expensive even before the rally. We believe that TELX's revenue growth would improve through the rest of FY2025E, as large OEM engagements ramp up."

However, it added, "challenges in the rest of the portfolio persist: (1) weak spending in the media and communications vertical and (2) middling presence in healthcare, along with deferrals by large clients. Valuations are stretched at 61X 1-yr forward PE (X), and bake in over 20% US$ revenue CAGR over FY2024-34E. Retain SELL with a FV of Rs5,500 (unchanged)."