Shares of Tata Elxsi zoomed 15 percent in trade on August 27, riding on the back of heavy trading volumes in the counter. With this, the stock not just extended its upward trend to the fourth straight session, but also gained over 22 percent in just two days.
As much as 38 lakh shares of Tata Elxsi changed hands on the exchanges so far, a meteoric spike as compared to the one-month daily traded average of one lakh shares. At 2.20 pm, shares of the technology company were trading at Rs 8,833.80 on the NSE. With the sharp surge in the stock, its market capitalisation also swelled to Rs 55,039 crore.
Meanwhile, the stock is trading at a trailing 12 month (TTM) price-to-earnings (PE) ratio of 69.1. Brokerage firm Incred Equities forecast a compound annual growth rate (CAGR) of 12.1 percent for revenue in dollar terms, 15.8 percent for EBIT, and 14.2 percent for the bottomline over FY24-27.
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Meanwhile, Saurabh Mukherjea-led Marcellus Investment Managers recently exited Tata Elxsi, which was a part of the firm's Rising Giants PMS portfolio. The fund house attributed the exit largely to expectations of better internal rate of return from new additions--Escorts Kubota, Coforge and CMS Info Systems.
Tata Elxsi posted a 6 percent sequential decline in its Q1 net profit to Rs 184 crore, while its revenue was marginally up 2 percent to Rs 926 crore.
Brokerage firm HDFC Securities sees a high certainty of double-digit growth in FY25,
driven by client and sub-segment skew, which is seen as a positive for Tata Elxsi. Aside from that, on the segmental front, the brokerage expects the company's transportation vertical to continue to drive growth in FY25-26 while the media and communications, and healthcare and lifesciences segments are expected to recover in FY26.
" The rate of recovery in the non- transportation segment will determine the trajectory in valuation multiples, following its de-rating over the past two years," the brokerage added.
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