Multibagger Tata Group stock is down 37% in two years, time to buy?
The multibagger stock fell 5% to Rs 5,501.90 on Wednesday against the previous close of Rs 5796.15. Market cap of the firm slipped to Rs 34,274 crore
- Jan 15, 2026,
- Updated Jan 15, 2026 1:03 PM IST
Shares of Tata Elxsi Ltd have disappointed investors in two years. The Tata Group stock has lost 37% in two years and fallen nearly 10% in six months and a year. However, the stock has clocked multibagger returns of 121% and 484% in five and ten years, respectively.
In the previous session, Tata Elxsi shares fell 5% to Rs 5,501.90 against the previous close of Rs 5796.15. Market cap of the firm slipped to Rs 34,274 crore. Total 0.63 lakh shares of the firm changed hands amounting to a turnover of Rs 35.57 crore.
Despite the correction in the IT stock, valuations are still high, according to brokerages.
According to Elara Capital, valuation appears full as the stock trades at 45x/38x on FY27E/FY28E. It has retained a sell call with a higher price target of Rs 4,520, on 30 times FY28E P/E. The brokerage said the company reported better-than-expected Q3 on revenue and margin fronts.
Revenue growth was led by the transportation vertical, which accelerated given some delayed deals materializing in Q3 (spill-over from Q2).
"We believe that double-digit growth in transportation is achievable, considering some of the recent deal wins as well as uptick in growth for its top client. However, double-digit growth in healthcare looks challenging, in our view, considering its continued weak performance," said Elara.
MOFSL has a price target of Rs 4,700 on the stock. The brokerage has reatined its 'Sell' call on the IT stock. It finds valuations of Tata Elxsi high at 43 times 12-month forward earnings, hard to justify given the lack of sustainable cross-vertical growth visibility. The brokerage values the stock at 30 times FY28E EPS.
The firm reported a 45% fall in net profit to Rs 108.89 crore for the October-December quarter of FY26 against Rs 199.01 crore net profit reported in the corresponding quarter of the previous financial year.
The calculation of profit took into account an exceptional item of Rs 95.69 crore due to the one-time impact of the New Labour Codes, which took effect from November 21.
Tata Elxsi said that changes to “employee benefit plans arising from legislative amendments constitute a plan amendment, requiring recognition of past service cost immediately in the statement of profit and Loss”.
Meanwhile, JPMorgan has retained its 'Neutral' stance on Tata Elxsi, citing high valuation, while raising the price target to Rs 5,100 per share.
The outlook for the automotive segment remains positive, with steady growth expected on the back of scope expansion in certain large deals, including Suzuki, as well as continued growth in JLR over the next one to two quarters.
Tata Elxsi is a subsidiary of Tata Sons, holding company of the Tata Group. It provides design and technology services across industries including automotive, broadcast, communications, healthcare, and transportation. The company aims to help customers reimagine their products and services through design thinking and the application of digital technologies such as IoT (Internet of Things), cloud, mobility, virtual reality and artificial intelligence.
Shares of Tata Elxsi Ltd have disappointed investors in two years. The Tata Group stock has lost 37% in two years and fallen nearly 10% in six months and a year. However, the stock has clocked multibagger returns of 121% and 484% in five and ten years, respectively.
In the previous session, Tata Elxsi shares fell 5% to Rs 5,501.90 against the previous close of Rs 5796.15. Market cap of the firm slipped to Rs 34,274 crore. Total 0.63 lakh shares of the firm changed hands amounting to a turnover of Rs 35.57 crore.
Despite the correction in the IT stock, valuations are still high, according to brokerages.
According to Elara Capital, valuation appears full as the stock trades at 45x/38x on FY27E/FY28E. It has retained a sell call with a higher price target of Rs 4,520, on 30 times FY28E P/E. The brokerage said the company reported better-than-expected Q3 on revenue and margin fronts.
Revenue growth was led by the transportation vertical, which accelerated given some delayed deals materializing in Q3 (spill-over from Q2).
"We believe that double-digit growth in transportation is achievable, considering some of the recent deal wins as well as uptick in growth for its top client. However, double-digit growth in healthcare looks challenging, in our view, considering its continued weak performance," said Elara.
MOFSL has a price target of Rs 4,700 on the stock. The brokerage has reatined its 'Sell' call on the IT stock. It finds valuations of Tata Elxsi high at 43 times 12-month forward earnings, hard to justify given the lack of sustainable cross-vertical growth visibility. The brokerage values the stock at 30 times FY28E EPS.
The firm reported a 45% fall in net profit to Rs 108.89 crore for the October-December quarter of FY26 against Rs 199.01 crore net profit reported in the corresponding quarter of the previous financial year.
The calculation of profit took into account an exceptional item of Rs 95.69 crore due to the one-time impact of the New Labour Codes, which took effect from November 21.
Tata Elxsi said that changes to “employee benefit plans arising from legislative amendments constitute a plan amendment, requiring recognition of past service cost immediately in the statement of profit and Loss”.
Meanwhile, JPMorgan has retained its 'Neutral' stance on Tata Elxsi, citing high valuation, while raising the price target to Rs 5,100 per share.
The outlook for the automotive segment remains positive, with steady growth expected on the back of scope expansion in certain large deals, including Suzuki, as well as continued growth in JLR over the next one to two quarters.
Tata Elxsi is a subsidiary of Tata Sons, holding company of the Tata Group. It provides design and technology services across industries including automotive, broadcast, communications, healthcare, and transportation. The company aims to help customers reimagine their products and services through design thinking and the application of digital technologies such as IoT (Internet of Things), cloud, mobility, virtual reality and artificial intelligence.