Sharekhan's research report on Tata Elxsi
Company stated that increased hyper-digitisation and technology adoption across industries would open up growth avenues as it is well-placed to leverage given its strong capabilities. Reports estimate global ER&D spends to grow at CAGR of 11% over 2020-2023 to $ 1.9 trillion. Digital engineering to ER&D spend is likely to reach at 47% in 2023 from 36% in 2020. TEL’s USD revenue and earnings are set to post a CAGR of 26% and 29%, respectively, over FY2021-FY2023E. We prefer TEL, given its strong balance sheet, improving cash generation and consistent dividends.
Outlook
We retain a Buy on Tata Elxsi Limited with a revised PT of Rs. 4,500, led by shift of ER&D budgets towards digital engineering, superior margins and differentiated technological capabilities.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
