Sell Tata Elxsi; target of Rs 4400: Motilal Oswal

Motilal Oswal is bearish on Tata Elxsi recommended sell rating on the stock with a target price of Rs 4400 in its research report dated October 09, 2025.

Broker Research

October 10, 2025 / 12:46 IST

sell

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Tata Elxsi

Tata Elxsi (TELX) reported revenue of USD105m in 2QFY26, up 1% QoQ in CC terms, in line with our estimate. Growth was led by Media and Communications (up 3.7% QoQ CC), whereas Transportation/HLS declined 0.5%/4.6% QoQ CC. EBIT margin was 18.5% (up 30bp QoQ), below our estimate of 20.3%. PAT was up 7.2% QoQ and down 32.5% YoY at INR1,548m (below our est. of INR1,662m). For 1HFY26, revenue/EBIT/PAT declined 4%/28%/28% YoY in INR terms compared to 1HFY25. We expect revenue to grow by 4% and EBIT/PAT to decline by 9%/4% YoY in 2HFY26. Muted tech spends across Automotive and Media are weighing on the nearterm momentum. Margins, once a defining strength for TELX, have come under meaningful pressure. We value TELX at 31x Jun’27E EPS to arrive at a target price of INR4,400. Reiterate Sell rating.

Outlook

Valuations remain steep at ~52x 12M FWD P/E, which we see as difficult to justify given current headwinds. We value the stock at 31x Jun’27E EPS, with a TP of INR4,400. We maintain our Sell rating.

For all recommendations report, click here