Tata Elxsi shares zoomed 27% in just 2 days; is more steam left?

Shares of Tata Elxsi Ltd continued their sharp upward run for the second straight session on Tuesday. The stock surged 17.72 per cent to hit an intraday high of Rs 9,082.90. It eventually settled 16.26 per cent higher at Rs 8,970.35. At this price, the scrip has gained 26.58 per cent in just two trading days.

The counter saw high trading volume today as around 4.81 lakh shares changed hands. The figure was higher than the two-week average volume of 10,000 shares. Turnover on the stock came at Rs 407.02 crore, commanding a market capitalisation (m-cap) of Rs 55,864.15 crore.

"Holding companies saw strong buying interest recently as their relative valuations looked attractive at current levels," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. In sync, Tata Elxsi shares also saw a strong upmove, Bathini added.

Tata Elxsi is a subsidiary of Tata Sons, a holding company of the Tata Group. It provides design and technology services across industries including automotive, broadcast, communications, healthcare and transportation.

Holding companies usually don't have operations of their own but they own investments in other listed entities, particularly within the same group.

On technical setup, support could be seen at Rs 8,600 level. And, a decisive closing above Rs 9,100 is required for further upside.

"Tata Elxsi has gained significantly in the last couple of sessions. The counter entered the overbought terrain with a shift in support base towards the Rs 8400-odd zone, followed by Rs 8,100. It is advisable to maintain caution after the rise and wait for consolidation above Rs 9,100 for the next leg of the rally," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Support will be at Rs 8,600 and resistance at Rs 9,100. A decisive close above Rs 9,100 level may trigger a further upside towards Rs 9,350. The expected trading range will be between Rs 8,000 and Rs 9,400 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

Immediate resistance on the counter will be at Rs 9,100 and support will be at Rs 8,600, said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 89.40. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 61.02 against a price-to-book (P/B) value of 19.18. Earnings per share (EPS) stood at 126.45 with a return on equity (RoE) of 31.43.

As of June 2024, promoters held a 43.92 per cent stake in the firm.