Share of Tata Elxsi Limited (TEL) has delivered 386 per cent return to its shareholders in the last 12 months. The share stood at Rs 910.85 on July 2, 2020. It has zoomed to Rs 4,430.40 today, translating into gains of 386 per cent during the period. In comparison, Sensex rose 46 per cent in one year.
Rs 5 lakh invested in the share of design and technology services provider a year ago would have turned into Rs 24.32 lakh today.
The midcap IT stock has gained 16.5 per cent in the last one week and risen 139 per cent on a year-to-date basis. It opened 1.26 per cent higher at Rs 4,299.75 against the previous close of Rs 4,246.20 on BSE today.
With a market capitalisation of over Rs 27,000 crore, the share of the Tata Group company stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
"Tata Elxsi has been trending higher in an upward sloping channel after having provided a breakout from the symmetrical triangular pattern. The daily, as well as weekly momentum indicators, are well in the buy mode which is a positive sign for the stock in the short to medium term," Jay Thakkar, VP and Head of Equity Research, Marwadi Shares and Finance Limited, told Business Today.
"On the lower side, it has a crucial support at 3,900 levels and till these levels are held it can continue its uptrend till 5,000 levels," he noted.
Sharekhan has a 'Buy' call on Tata Elxsi Limited with a revised target price of Rs 4,500 per share. It expects TEL's revenue growth momentum to remain strong in the medium term because of the shift of ER&D budgets towards digital engineering, presence in high-growth verticals, strong deal wins, traction for its offerings, and developing partnerships in new areas.
"Tata Elxsi Limited's (TEL) FY2021 annual report highlighted that increased hyper-digitisation and technology adoption across industries would open up growth avenues for TEL, as it is well placed to leverage given its strong relevant digital capabilities," the brokerage firm said.
"As rising digital initiatives have opened up opportunities to reshape the technology stack of large enterprises, TEL positions itself as a strategic design digital partner that can help enterprises to re-imagine their products and services - from strategy, insights, service design, interaction design to technology implementation, and integration," it noted.
In FY21, the company's net profit increased 43.7 percent to Rs 368.1 crore, while revenue grew 13.4 percent to Rs 1,826.2 crore over the previous fiscal. The growth was led by America and India with both reporting 21.1 per cent QoQ growth while Europe grew by 1.6 per cent QoQ.
The company also said it added key new customers including a Tier-1 operator and a leading medical devices manufacturer in North America.
It also closed some large deals including a multi-million dollar deal with a global OEM for an integrated connected vehicle program in one of their key markets that will leverage IoT platform.
Tata Elxsi is amongst the world's leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare, and Transportation.
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