Shares of Tata Elxsi hit a fresh all-time intraday high of Rs 10,398.40 on Friday, surging as much as 9.5 per cent over its previous close due to a strong growth outlook. The stock finally settled 7.85 per cent higher at Rs 10,241.45. Tata Elxsi is a subsidiary of Tata Sons, holding company of the Tata Group.
The design and tech service provider could likely witness another “15-20 per cent return” if Indian equity benchmarks stay “good”, an expert opined.
“The company’s business model is unique in comparison to its peers. Until the market is good, this stock may give another 15-20 per cent return over the next 8-10 months. Valuation-wise, Tata Elxsi would be expensive, but it hardly saw any correction given the global recession fears,” said AK Prabhakar, Head of Capital, IDBI Capital.
Taking closing values into consideration, the stock has climbed as much as 138.86 per cent in one year.
Tata Elxsi’s chief marketing officer Nitin Pai said the company brings new-age solutions for driverless cars, connected vehicles and more and these designs are helping customers reimagine products and services.
“We are focused on working with customers in application areas that are expected to experience sustained growth, driven by broad and long-term trends in digital technology. These trends require enablers – autonomous systems, robotics, securely-connected machines and personal devices, digitalisation and electrification of automobiles and infrastructure, advanced communications equipment and networks and connected healthcare platforms,” Pai told news agency PTI.
Strong numbers recorded in Q1
Yearly, the company’s net profit jumped by 62 per cent to Rs 184.72 crore in the June quarter (Q1) of the current financial year 2022-23. Last year, Tata Elxsi’s profit was at Rs 113.37 crore.
Total revenue from operations soared 30 per cent to Rs 725.9 crore in Q1.
Earnings per share (EPS) rose to Rs 29.66 in Q1 FY23 from Rs 18.21 in the year-ago period. Also, the company stated that it crossed the 10,000-employee mark with 771 net additions in the quarter.
Technical view
“The target price applied to the breakout price point comes around Rs 11,500 followed by Rs 11,750 (projected 178.2 per cent retracement level). However, due to the overbought nature of the stock, risk reward ratio seems unfavorable and accumulation at lower levels of Rs 9,500 is advisable,” said Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking Ltd.
