Tata Elxsi shares to turn ex-dividend today; here's outlook, target price for Tata group stock

Tata Elxsi dividend: Shares of Tata Elxsi Ltd would turn ex-date for dividend on Wednesday. The board of directors of the IT firm had declared a dividend of Rs 75 per share on April 17, which would be subjected to approval of members at the company's 36th AGM. The dividend, if approved, will be paid on or before June 30, 2025, subject to deduction of tax at source. 

June 11 was fixed as the record date for determining entitlement of members to dividend for the financial year ended March 31, 2025. 

Tata Elxsi generates nearly 97 per cent of its revenue from Software Development Services (SDS), which includes embedded product design (EPD), industrial design & visualization (IDV) and integrates product engineering services across verticals—Transportation (54 per cent), Media & Communications (32 per cent), Healthcare & Life Sciences (12 per cent) and Others (1 per cent). The remaining 3 per cent comes from System Integration Services & Support (SIS).

Tata Elxsi shares are up 10 per cent in the past one month but are down 1 per cent year-to-date. The one-year return for the IT stock stands negative at 5.46 per cent.

Ventura Securities said near-term uncertainties, particularly in the automotive segment (contributes 54.2 per cent) and media and communications vertical (contributes 32.5 per cent) are expected to hinder growth. 

"European OEMs face intensified competition from Chinese players, further complicated by China’s recent rare earth export restrictions, which impact the supply of critical materials needed for EVs. The M&C vertical is impacted by customer M&A activity leading to cautious R&D spending which pose challenges to fully realizing this potential
in the short term," Ventura said. 
The domestic brokerage said these headwinds are further compounded by tariff uncertainty and the currency fluctuations risk, which could negatively influence the margin profile.

"Our assumptions are much ahead of Street expectations and despite building in bullish prospects, we believe that current valuations of 36.4 times FY28 earnings are stretched. We initiate coverage with a Sell for a price target of Rs 5,518 (31.0x FY28 P/E) representing a downside of 14.8 per cent from the current CMP of Rs 6,473 over the next 24 months," Ventura said on June 9.