Shares Of This Tata Stock See Sharp Dip Of 15% In 1 Week, Falls Over 7% In Just 1 Day

Shares of Tata Elxsi Ltd have been falling for some time. The stock has now fallen 33% from its 52-week high level. Brokerages firm ICICI Securities Ltd and HDFC Securities have given "sell" rating to Tata Elxsi while KR Choksey has given "accumulate" rating to the stock.

The company for the quarter ending September 30, 2022 declared a standalone total income of Rs 781 crore, up 6% from last quarter total income of Rs 736 crore. It declared a net profit after tax at Rs 174 crore in latest quarter. For the September quarter, net profit of Tata Elxsi fell by more than 5%.

Stock Outlook: The shares of Tata Elxsi have declined by 7.39% intraday and the last trading price of the stock is Rs 7203 apiece. The stock's 52-week high is quoted at Rs 10,760 and 52-week low is quoted at Rs 5,264 apiece, respectively.

Market Capitalisation: The company has a market capitalisation of Rs 44,860.52 crore.

5-Years Return: The stock has given a return of 749% in last 5 years, 917% in last 3 years, and 14% in last 1 year. The mid cap company has given negative return of 11% in last 3-months, 17% in last 1 month and 15% in 1 Week.

What Brokerages are saying?
According to ICICI Securities in its October 16, 2022 report, "Tata Elxsi (TELX) reported revenue growth of 4.7% QoQ CC, slightly below our estimate of 5% QoQ CC. Growth was constrained by the supply side (i.e. lower senior management bandwidth) and softness in media & communications (1% QoQ CC) vertical due to macro headwinds. Transportation (4.6% QoQ CC) and healthcare & medical devices (5.1% QoQ CC) grew at healthy rates. Growth was strong in industrial design (15.5% QoQ CC) and systems integration (SI) (24% QoQ CC)."

ICICI Securities said, "We like the company for its robust growth profile and industryleading margins. However, its super premium valuation of 65x on FY24 EPS (123% /77% premium to LTTS/KPIT) drive our SELL rating. We value TELX at a target multiple of 40x FY24E earnings to arrive at a fair value of Rs5,173 (earlier: Rs5,322). Sell Tata Elxsi with a target price of Rs 8,456."

Meanwhile, HDFC Securities in its October 15, 2022 report stated, "Tata Elxsi (TELX) posted lower-than-estimated Q2FY23 performance, even as the revenue print was 4.7% QoQ CC (yet lower than its 6%+ track record). Growth moderation was impacted by deceleration in the Media & Communication vertical, which is likely to persist in the near term on account of some slowdown/deferment in programs. The outlook on transportation vertical and IDV division remains strong, supported by the deal Velocity. Maintain SELL, with a TP of INR 6,540, valuing TELX at 45x Jun-24E EPS."

KR Choksey, in its October 17, 2022 report, said, "TELX is currently trading at a valuation with a P/E multiple of 69.2x/56x on FY23E/FY24E earnings. We expect strong deal momentum across verticals, addition of new clients from newer geographies, higher focus on IDV especially in design-led digital projects, and multi-year tailwind in EPD and hence we are assigning a P/E multiple of 64x to the FY24 estimated EPS of INR 138.8 to arrive at a target price of INR 8,884 per share, an upside of 14.1% over the CMP. Accordingly, we maintain our rating to an "ACCUMULATE" to the stock."

The stock has been picked from the brokerage report of ICICI Securities, KR Choksey, and HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.