ICICI Securities research report on Tata Elxsi
TATA Elxsi (TELX) reported better-than-expected Q2FY26 performance on both revenue and margins fronts. However, signs of structural recovery in demand are yet to emerge. Revenue growth, in Q2, was led by the media vertical, while performance in auto and healthcare remains muted. Industry-wide challenges in media and communication are persisting; therefore, growth momentum is unlikely to sustain in H2FY26. In the auto vertical, demand is impacted in top client due to a cyberattack – visibility on a recovery timeline is limited. Management expects H2 revenue growth to outpace H1; but a significant recovery may not take shape, considering seasonal weakness in Q3.
Outlook
We continue to value TELX at 30x (one-year forward P/E) on Sep’27E EPS of INR 141 and arrive at a revised TP of INR 4,230. Maintain SELL.
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