Sharekhan's research report on Tata Elxsi
Q4FY22 was yet another quarter of strong revenue growth led by ramp-up of deals, while margins were in line with hopes; quarter saw healthy net hiring, strong deal intake across verticals, expansion into new geographies and good client mining. The company entered new geographies such as Middle East, Africa and Latin America, where it saw strong customer addition especially in media segment. TEL is well placed to deliver another year of strong growth in FY2023E, given strong order intake, traction for large deal conversation and increasing spends in digital engineering.
Outlook
We retain a Buy on Tata Elxsi Limited (TEL) with a revised PT of Rs. 9,000, given its market share gains, superior margin profile, and presence in fast growing ERD market. We expect USD revenue/earnings to report a 23%/20% CAGR over FY2022-FY2024E.
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