Tata Elxsi stock hits all-time high in volatile trade; here's why

Tata Elxsi stock hit its all-time high in a highly volatile market today amid reports that MSCI was likely to include the firm in its standard index. Edelweiss Alternative & Quantitative Research in its latest report said MSCI could add five stocks and remove two stocks from its Standard Index. Tata Elxsi, Jindal Steel & Power, Voltas, Varun Beverages and Astral were likely to be added in the MSCI Standard Index. However, Indraprastha Gas and MRF (India) could get excluded, said Edelweiss.

Tata Elxsi share touched a fresh high of Rs 9,078, rising 7.55 per cent on BSE. The large-cap stock has gained 17.18 per cent in the last two days. Tata Elxsi stock opened higher at Rs 8,460 against previous close of Rs 8,440.

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The share has gained 52.19 per cent since the beginning of this year and risen 237.07 per cent in one year. Tata Elxsi stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

A total of 1.32 lakh shares of the firm changed hands, amounting to a turnover of Rs 115.43 crore.

Market cap of the firm rose to Rs 55,812 crore on the BSE. The stock hit a 52-week low of Rs 2,614.30 on March 26, 2021.

"Robust Q3FY22 earnings and a positive outlook on FY23 margins along with strong fundamentals have led to an unprecedented rally in Tata Elxsi despite promoter group offloading some shares last week. Technically, Tata Elxsi looks overbought and investors are advised to book profits at current levels and wait for a dip near 7,900 to re-enter this stock for better returns, "said AR Ramachandran, Co-founder & Trainer, Tips2Trades.

The Tata Group firm reported a 43.5 per cent year-on-year (YoY) rise in its net profit for October-December quarter at Rs 151 crore. On a quarter-on-quarter (QoQ) basis, profit was higher by 20.4 per cent.

The design-led technology services provider's revenue from operations climbed 33.2 per cent year-on-year (YoY) and 6.7 per cent quarter-on-quarter (QoQ) to Rs 635.4 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 14.8 per cent QoQ and 46.8 per cent YoY to Rs 210.8 crore.

The EBITDA margin stood at 33.2 per cent during the quarter under review as against 30.8 per cent in the preceding quarter and 30.1 per cent in the year-ago quarter.

Meanwhile, Sensex was trading 150 points higher at 57512 and Nifty rose 51 points to 17,204. Earlier, in the session, Sensex fell to a low of 56825 and Nifty touched an intraday low of 17,003.

Tata Elxsi is a provider of design and technology services company. It operates in two segments: system integration and support and software development and services.