Reviews

Published: Jan 13, 2023
Updated: Jan 13, 2023

Tata Elxsi Q3 Review: Strong Technology and Design Capabilities Drive Growth

About the company

Tata Elxsi, a leading provider of system integration and software development, has reported strong financial results for its Q3. The company's core strengths lie in its hard core technology and design capabilities, which have driven growth in its end-to-end solutions across the product lifecycle. Tata Elxsi operates in the business segments of Systems Integration and Support, Software Development and Services.

Share price remain slightly positive

Shares of Tata Elxsi Ltd. traded 0.63% up at Rs 6220.95, even as the BSE benchmark Sensex dropped 179.46 points to 59778.57. The stock quoted a 52-week high price of Rs 10760.4 and 52-week low of Rs 5708.1. The company's P/E ratio stands at 57.87, indicating that investors are willing to pay a higher share price due to growth expectations in the future. The stock's Price-to-book value of 34.39 also indicates the inherent value of the company and reflects the price investors are willing to pay for no growth in the business.

New Developments:

Tata Elxsi has recently reported strong growth in its net income and total bookings, as well as improvements in operating margins. The company's Beta value, which measures its volatility in relation to the broader market, stood at 1.02. The company has recently reported strong growth in net income and total bookings, as well as improvements in operating margins.

Expected Outcome:

The expected outcome for Tata Elxsi is continued growth, driven by the company's core strengths in hard core technology and design capabilities, as well as its end-to-end solutions across the product lifecycle. The company's P/E ratio and Price-to-book value also suggest that investors expect future growth.

Information Technology Competitors:

Tata Elxsi's main competitors in the system integration and software development space include companies such as Infosys, Wipro, and HCL Technologies.

For Infosys, in the latest Q3, it reported a net profit of ₹ 6,586 crore ($905 million), a 13% increase YoY and revenue of ₹ 38,318 crore ($5.2 billion), a 20.2% increase YoY. The company's large deal TCV for the quarter was also strong, coming in at $3.3 billion, the strongest in the last 8 quarters.

Wipro too reported an excellent Q3 Result bringing faith of the investors back to the resilient IT sector.

Strong fundamentals , outlook positive

The technical analysis of Tata Elxsi's stock indicates a potentially positive outlook for the company. The relative strength index (RSI) of the stock currently stands at 41.98. The RSI is a commonly used technical indicator that oscillates between 0 and 100, with a value above 70 indicating an overbought condition and a value below 30 indicating an oversold condition. However, it is important to note that the RSI should not be viewed in isolation and may not be sufficient to make a trading decision on its own. Additionally, fundamental analysis, such as evaluating the company's financial performance and industry trends, should also be considered when assessing the outlook for the company.