A 35-year-old software company of Tata Group is among its top dividend king stocks. In less than 8 years, this tech biggie of the conglomerate has rewarded investors with 1 bonus share and a whopping Rs 208.1 per share or 2,081% dividend in total, while also emerging as a multi-bagger with gains of a whopping 933% on BSE. More rewards are about to come, to be precisely in just a matter of two weeks. It is none other than Tata Elxsi.
Tata Elxsi Dividend:
In its regulatory filing on April 8, Tata Elxsi announced that it will be considering the recommendation of dividend on April 23, if any, on the equity shares of the Company for FY24. So far, as per the data, Tata Elxsi has only paid 1 dividend each every year and those are the final ones.
Dividend payments are carried in two forms interim and final. The interim dividends are announced during the financial year, while the final dividend is declared after that respective year.
The final dividends are irrevocable, and generally, the rates are higher compared to interim dividend payouts.
Since June 2001, Tata Elxsi has delivered up to 24 dividends, as per Trendlyne data. The highest dividend payout was Rs 60.60 dividends per share in 2023. However, since its bonus issue in 2017, the company has delivered as much as Rs 208.1 or 2,081% dividend per share cumulatively to date.
Currently, the stock has a dividend yield of 0.76%.
Tata Elxsi Bonus Share:
So far, apart from dividends, Tata Elxsi has paid only 1 bonus share on the existing 1 share, resulting in a ratio of 1:1. It was in September 2017 when Tata Elxsi turned ex-bonus on the 18th of that month for a bonus issue in the ratio of 1:1.
Bonus shares multiply gains in Tata Elxsi massively. For example, if you held 500 shares of Tata Elxsi on April 7th, 2017, your investment value would be around Rs 3,83,690 on the share price of Rs 767.38.
But if you held those shares on the day Tata Elxsi turned ex-bonus, then you will receive another 500 bonus shares on your existing 500 shares, totalling 1000 shares.
Bonus shares are free of cost. And by rising in terms of number, it allows investors to hedge impressive gains. For example, after the allotment of bonus shares, that 1,000 shares would be valued at Rs 13,26,850, a year after the ex-bonus date. On September 18, 2018, the share price was at Rs 1,326.85 apiece.
And, if an investor continued to hold those 1,000 shares up till now. Then their corpus would be around massive Rs 79,27,150 at Rs 7,927.15 per share as of April 8, 2024.
The higher the number of shares, the higher would be your gains.
Tata Elxsi Q4 Results Expectations:
On April 23, 2024, Tata Elxsi will also announce its Audited Financial Results of the Company for the quarter and year ended March 31, 2024.
In Q4FY24, for Tata Elxsi, Kotak Institutional Equities forecasted revenue growth of 0.9% c/c qoq due to weakness across all verticals within EPD offset by growth in IDV. Within the EPD segment, (1) transportation has been impacted due to deferral in deal ramp-ups and higher exposure to tier-1 clients where spends has been constrained even as top account growth has been robust; (2) media & communications vertical clients remain cautious on spends and (3) healthcare and medical devices vertical has been impacted due to ramp-down in few short-term engagements during the quarter.
Also, the brokerage expects the EBIT margin to improve by 40 bps qoq to 27.2%, primarily driven by better utilization and the absence of visa expenses during the quarter.
Tata Elxsi Share Price, And Target:
On BSE, after the market hours of the April 8th session, Tata Elxsi's share price ended at Rs 7,927.15 apiece, down by 1.5% with a market cap of Rs 49,367.47 crore. In a year, Tata Elxsi shares have gained 28% on BSE.
Its technical indicators are steady. As per Trendlyne data, the RSI is 56.5 which is stable since RSI below 30 is considered oversold and above 70 overbought. Similarly, its MFI is at 66.0, also steady. The stock's weekly average delivery volume is 37.39%, while it is trading above 6 out of 8 SMAs, and above 5 out of 9 Oscillators in the bullish zone.
Target Prices: The latest recommendation is for profit booking in Tata Elxsi shares. At the latest, JP Morgan has maintained 'Underweight' on the company for a target price of Rs 6,000 per share with Neutral Outlook. Also, Kotak has a SELL recommendation for a target price of Rs 5,400.
However, Tata Elxsi shares have been lately flirting between 7,900 to 8,100 zones. And Prabhudas Lilladher is currently among the only brokerages to recommend BUY on Tata Elxsi for near-term gains.
Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher last week 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. 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 added that the RSI is well-placed and is on the rise, with the potential to rise further in the coming days. Accordingly, Parekh suggests buying and accumulating this stock for an upside target of 8600-9000, keeping the stop loss near the 7200 level.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor 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.
Click it and Unblock the Notifications
Sign in with Google