Fundamental Analysis

TATA ELXSI LTD. 

Ticker : 500408 
BUY : Rs 2770.60 
Target : Rs 3100

Tata Elxsi Limited is engaged in the design and development of computer hardware & software. There are two segments through which the company operates namely: System integration & support as well as software development & services. On the consolidated quarterly front, the company recorded net sales of Rs 231.28 crore for Q3FY21, which is an increase of 9.34 per cent from its net sales of Rs 211.52 crore reported for Q3FY20. The operating profit dipped by 0.69 per cent to Rs 46.89 crore in Q3FY21 from Rs 47.21 crore posted in Q3FY20. On the contrary, its net profit was reported at Rs 29.83 crore in Q3FY21 from Rs 21.85 crore in Q3FY21, clocking gains of 36.55 per cent. The company saw an all-round market growth, with Americas reporting 15.9 per cent growth QoQ, while Europe reported 6.2 per cent QoQ growth, which can be attributed to the key automotive deal wins. India reported accelerated growth of 19.9 per cent QoQ. Hence, we recommend BUY.