Tata Elxsi Share Price 2023: A Detailed Analysis

Stay informed about Tata Elxsi share price. Get the latest updates and analysis on the stock’s performance.

Tata Elxsi is a global design and engineering services company that provides solutions to the telecommunications, automotive, and industrial sectors. The company was founded in 1981 and is headquartered in Bangalore, India. Tata Elxsi has a market capitalization of 564.90 billion (as of December 15, 2023) and is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Tata Elxsi Share Price Performance

The Tata Elxsi share price has been on a bull run in recent years, rising from ₹570 in 2017 to ₹7,730 in July 2023. This growth has been driven by a number of factors, including the company’s strong financial performance, its growing customer base, and its focus on emerging technologies.

Tata Elxsi Share Price
Source: TradingView

 

Financial Performance of Tata Elxsi share

TATA Elxsi’s financial performance in the last year showed significant growth. The company’s annual revenue increased by 28% to reach Rs 3,218.5 Crores, surpassing the average revenue growth of 21.7% for its sector in the same fiscal year. Additionally, TATA Elxsi’s annual net profit rose by an impressive 37.4% to Rs 755.2 Crores, while the sector’s average net profit growth stood at -5.1%.

The Return on Equity (ROE) for TATA Elxsi in the last financial year was 36.2%, surpassing the 20% benchmark. This indicates that the company efficiently utilized shareholder’s capital to generate profits.

Moreover, TATA Elxsi boasts a comfortable Interest Coverage Ratio of 63.9, indicating its ability to meet interest payments with its earnings (EBIT), which is higher than the required minimum of 1.5.

Valuation of Tata Elxsi share

However, in terms of valuation, TATA Elxsi’s Price to Earning Ratio is 63.8, exceeding the sector’s PE ratio of 57.5. This suggests that the stock may be relatively overvalued compared to its peers. Additionally, the Stock Price of TATA Elxsi declined by 0.9% in the past year, underperforming its sector by 20%.

The Relative Strength Index (RSI) currently stands at 61.7. This indicates that the stock has experienced moderate upward momentum and is approaching overbought territory. Investors should be cautious as it suggests the possibility of a potential price correction or consolidation.

The Earnings Per Share (EPS) for Tata Elxsi is reported at 121.26 rupees. This figure represents the company’s profitability per outstanding share and is an important metric for investors to assess the company’s financial performance on a per-share basis.

Tata Elxsi Share Price
Source: Screener

 

When it comes to cash flow, Tata Elxsi faced a negative cash flow of -17 crore rupees in March 2023. In comparison, the cash flow for March 2022 was positive at 51 crore rupees. This indicates a decrease in cash generation for the company in the most recent fiscal year, signifying potential challenges in managing and generating cash.

The Price-to-Book (P/B) ratio for Tata Elxsi shares is reported at 23.07. The P/B ratio is a financial metric used to assess the valuation of a company relative to its book value per share. A higher P/B ratio suggests that the market values the company’s assets and future earnings potential more than its book value.

Overall, TATA Elxsi demonstrated strong financial growth with increased revenue and net profit. The company efficiently utilized capital and maintained a healthy interest coverage ratio. However, investors should consider the higher valuation and the recent underperformance of the stock compared to its sector.

Customer Base of Tata Elxsi

Tata Elxsi’s customer base has grown steadily in recent years. The company’s top 10 customers accounted for 55.70% of its revenue in the financial year 2022-23. These customers include some of the world’s leading telecommunications, automotive, and industrial companies.

What is the Work of Tata Elxsi?
Tata Elxsi

Tata Elxsi is focused on emerging technologies such as 5G, artificial intelligence, and the Internet of Things. The company believes that these technologies will drive future growth in its business.

Despite the strong growth of the Tata Elxsi share price in recent years, there are some risks to consider. These risks include:

  • The company’s dependence on a few large customers
  • The cyclical nature of the telecommunications industry
  • The increasing competition from global players

Overall, the Tata Elxsi share price is a good investment for investors who are looking for exposure to the growth of the telecommunications, automotive, and industrial sectors. However, investors should be aware of the risks before investing in the stock.

Risks when buying Tata Elxsi share

There are some risks to consider before investing in Tata Elxsi. These risks include:

  • The company’s dependence on a few large customers
  • The cyclical nature of the telecommunications industry
  • The increasing competition from global players

Here are some of the factors that could affect the Tata Elxsi share price in the future:

  • The performance of the telecommunications, automotive, and industrial sectors
  • The adoption of emerging technologies such as 5G, artificial intelligence, and the Internet of Things
  • The company’s financial performance
  • The company’s ability to attract and retain customers
  • The company’s competitive landscape

Disclaimer: Investors who are considering investing in Tata Elxsi should carefully consider the risks and rewards before making a decision.

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