Tata Elxsi Stock Hits A Record High After Q3 Results

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Shares of Tata Elxsi Ltd. jumped to a record high after the technology and design company beat analysts’ estimates in the quarter ended December.

The company’s net profit rose 33% over the preceding quarter to Rs 105.2 crore in the October-December period, according to its exchange filing. That compares with the Rs 85.2-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue increased 11% sequentially to Rs 477.1 crore during the period, against the Rs 455.9 crore estimated.

“We are entering the fourth quarter and a new year with the reinforced confidence of a strong deal pipeline across markets and industries, and capabilities in product engineering, design and digital,” Manoj Raghavan, managing director and chief executive officer at Tata Elxsi, was quoted as saying in the filing.

The company’s operating profit, or earnings before interest, tax, depreciation and amortization, too, rose 22% over the previous quarter to Rs 143.5 crore, beating the Rs 134.7-crore forecast. Its margins expanded 270 basis points to 30.1%.

The company’s largest division, embedded product design, grew 14.5% year-on-year and 9.3% over the previous quarter, according to an investor presentation. The industrial design and visualisation business, too, posted growth of 7.1% year-on-year and 27.5% sequentially.

The concentration of Tata Elxsi’s top 10 clients, however, has come down to 47.2% from 49.3% in second quarter and 50.8% a year earlier, the investor presentation showed.

Shares of Tata Elxsi rose as much as 10.2% to an all-time high of Rs 2,299.9 apiece. The stock has gained in eight of the last nine trading sessions, surging more than 23% during the period.

Of the six analysts tracking the company, one recommends a ‘buy’, three suggest a ‘hold’ and the remaining two have a ‘sell’ rating. The stock trades 28% higher than its Bloomberg consensus 12-month price target of Rs 1,548 apiece.

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