Tata Elxsi shares gain despite Q4 earnings miss; here's what brokerages say 

Shares of Tata Elxsi climbed over 5% in early deals on Monday post Q4 earnings. Tata Elxsi stock climbed 5.31% to Rs 5160 against the previous close of Rs 4899.75 on BSE. The stock rose despite a 13% fall in Q4 profit. Morgan Stanley has a underweight call on the Tata Group stock.

The brokerage has cut price target to Rs 4,660. The Q4 earnings missed expectations, said the global brokerage  adding that autos may see some deal ramp ups. Media appears soft despite deal wins and macro is not supportive.

With weak exit revenues,  Morgan Stanley warned that the earnings downgrade cycle could continue. The stock which is trading at high valuations could remain an underperformer, added the brokerage.

JP Morgan has an underweight call on the Tata Group stock. It has also reduced its price target  to Rs 4400 post Q4 earnings.

The brokerage Tata Elxsi's Q4 earnings missed expectations sharply on both reveneu and margins front for the third successive quarter.

Revenues declined 5.3% CC QQ led by declines at auto (down 9.7%) & Media & Telecom (down 6.3%).

Healthcare was only bright spot (up 3.5%). The global brokerage cut its earnings estimates for the firm by 1-2% over FY26-27E.

ICICI Securities said the firm has reported a muted Q4FY25 earnings. It has assigned a reduce call from sell call for the Tata Group stock.

"We largely maintain our estimates and tweak FY26E EPS by 130bps on slightly better near-term visibility lent by large deals and optimism in healthcare-led demand," said ICICI Securities.

The recent stock correction of 7% in last one month has been set at an unchanged 1-year forward PE of 30 times.

The brokerage said full-year FY25 growth was muted due to slowdown in media & communication and healthcare & life sciences verticals.

Incred Equities reduced its price target to Rs 4641 against Rs 6064 earlier.

"We now expect US$ revenue/PAT (Rsm) CAGR of 6.7%/11.3%, respectively, over FY25-27F and cut our discounted cash flow or DCF-based target price to Rs 4,641 vs. Rs 6,064 earlier, implying a target P/E of 30x FY27F EPS, a 10% premium to the peer group (LTTS, Tata Technologies, and KPIT Technologies) average of 27.5x FY27F consensus EPS, considering the superior margin profile and return ratios," said Incred Equities.

Tata Elxsi reported a 13.4% quarter-on-quarter decline in net profit, amounting to Rs 172.4 crore for the fourth quarter of FY25, down from Rs 199 crore in the previous quarter. The fall was attributed to ongoing challenges in its primary transportation segment, which is experiencing difficulties due to global trade and geopolitical tensions. The board recommended a final dividend of Rs 75 per equity share (750%) for FY25, subject to shareholder approval at the upcoming Annual General Meeting.