Tata Elxsi Q1 Results Review - A Mixed Quarter: HDFC Securities

HDFC Securities Institutional Equities

Tata Elxsi Ltd. posted a mixed quarter with strong growth in the transportation vertical, which offset weakness in the healthcare and Lifesciences vertical.

Tata Elxsi posted revenue growth of 2.4% QoQ and 8.4% YoY constant currency with a skewed performance and hyper growth in one-third of the business (OEM/transportation), while the remaining portfolio was sluggish.

Media and communication vertical, which had strong growth momentum in FY20-22 followed by a sluggish FY22-24, can start to revive. Volatility in the healthcare and lifesciences segment will persist for another quarter though.

We continue to believe that T1 client growth momentum and OEM sub-segment within the Transportation segment will drive the bulk of the growth over FY24-26E (more than 75% of incremental growth).

Valuations are still a stretch, maintain Reduce with a target price of Rs 6,710, based on 38 times June-26E earnings per share.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.