Buy Tata Elxsi: target of Rs 5000: Sharekhan
Sharekhan is bullish on Tata Elxsi has recommended buy rating on the stock with a target price of Rs 5000 in its research report dated July 16, 2021.
July 19, 2021 / 05:13 PM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.
Sharekhan's research report on Tata Elxsi
CC revenues grew by 37.4% y-o-y continuing strong outperformance seen in past four quarters, but EBITDA margin lagged estimates owing to a one-time bonus; net staff additions stayed strong. Growth momentum likely to continue given a strong order book, robust deal pipeline, improving deal size, presence in high-growth verticals and hyper-digitisation and technology adoption across industries. EBITDA margin to remain in a narrow band in FY22 despite headwinds, given strong revenue growth, higher offshoring, and better realisations in complex projects. We expect USD revenue/earnings to clock a 24%/26% CAGR over FY2021-FY2024E.
We retain a Buy on Tata Elxsi with a revised PT of Rs. 5,000, as revenue is set to grow at twice the industry average, margin profile is superior and company has differentiated technological capabilities.
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