TATA ELXSI LTD

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.

Key Services

Software Development and Services- 97.2%

Systems Integration and Support- 2.8%

Shareholding Pattern

-PUBLIC GROUP

-PROMOTER GROUP

Financial Summary

Synopsis of Financials

• Profit After Tax (PAT) grew by 24.6% quarter-on-quarter to INR 229.4 crores, supported by R&D incentives and tax credits.
• Strong growth in revenue from India (31.2% year-on-year) and Japan/emerging markets (81.9% year-on-year).
• Attrition rate maintained at 12.5%, with plans to onboard freshers.
• Revenues from operations during Q1 FY ’25 was INR 926.5 crores, growing 2.4% QoQ and 8.4% YoY in constant currency terms.
• EBITDA for the quarter was INR 252.3 crores, with a flat growth of 0.3% YoY.
• PBT for the quarter was INR 252.4 crores.
• EBITDA margin would have been 29.4% and PBT margin would have been 28.4% if not for a one-time expense.
• Contribution to the Progressive Electoral Trust of INR 19.78 crores for the quarter ended June 30, 2024.

Final Outlook

In FY 2024 Company reported 14.15% rise in its Net income, and Sales growth is Increase by 11.05% which show strong hold of TATA Elxsi in the market. The total current liability also declined by 6.82%. Company also reported highest ROCE than their competitiors i.e. 42.74% . Peer comparison places Tata Elxsi in a strong position relative to other IT services firms, such as Infosys and Tech Mahindra, due to its niche focus on design-led engineering. Current market conditions show demand for digital transformation and engineering services, areas where Tata Elxsi excels . Tata Elxsi also show highest ROE than their peers i.e. 34.47%. According to me Due to its strong financial, raising growth i recommend to BUY the stock.

This rise was driven by exceptional financial performance, including record growth for the financial year 2021-22. The company reported a 35.3% year-on-year increase in operating revenue and a 49.3% increase in profits, marking its highest-ever annual growth. The company’s strong Q4 results also contributed, with a 31.5% year-on-year growth in revenue, mainly powered by its key sectors like transportation, media and communications, and healthcare, all showing substantial growth​.

I will give Buy recommendation for this stock.