Tata Elxsi – Affordable? Oversold?

Tata Elxsi is amongst the world’s leading providers of design and technology services across industries including Automotive, Media, Communications and Healthcare. Tata Elxsi provides integrated services from research and strategy to electronics and mechanical design, software development, validation and deployment, and is supported by a network of design studios, global development centers and offices worldwide.

Tata Elxsi registered its earnings for December quarter of the current fiscal year with their net profit at Rs 195 crore which is remarkable growth of 29 percent from Rs. 151 crore which was registered in December 2021. EBITDA was computed at Rs 266 crore in the third quarter which is a rise of 22 percent from Rs 218 crore in the same quarter of the past year.

The company has registered its EPS of Rs. 31.26 for the third quarter which ended on 31 December 2022 as against Rs. 27.98 for the second quarter which ended on 30 September 2022.

Tata Elxsi has reported its total income of Rs 837 crore during the third quarter as compared to Rs 642 crore during the corresponding previous year quarter.

Global research and brokerage institution Morgan Stanley had placed an underweight rating on Tata Elxsi at Rs 5,800 per share. They said that “Embedded Product Design (EPD) business slowed for fifth straight quarter affected by furloughs and project deferments while commentary on outlook is balanced. Cost normalisation and ESOP costs should keep margin expectations in check”.

Tata Elxsi Weekly Candlestick Chart on Sharekhan’s TradeTiger

Tata Elxsi stock price has taken strong support along the 50% retracement level. The price is approaching the 200-day exponential moving average and the weekly MFI is at 31 points which marks the stock as oversold. As per Morgan Stanley’s rating, the stock has slumped down to the brokerage firm’s target level around Rs 5800. Investors may accumulate this IT stock for long-term growth.

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