Tata Elxsi has turned into a multi-bagger with a nearly 5,879% return in the past ten years. If you put in Rs 10,000 back then, you’d have about Rs 6 lakh now.
Tata Elxsi is a big name worldwide for doing design and tech things, especially in areas like cars, media, healthcare, and transport.
In the last quarter of June 2023, the money they made went up by 25%, reaching Rs 201 crore (which is like $29.8 million), from Rs 160 crore the year before.
Stock research analysts suggest that if you’ve already invested, it’s a good idea to hang on to your shares. But if you’re thinking about putting in new money, you might want to be a bit careful if your goal is short-term swing trading.
Now, let’s discuss what could be the price of Tata Elxsi’s shares in 2025.
Tata ELXSI Share Price Target 2025
Tata ELXSI’s share price is currently dancing around the range of Rs 7,050-70. Now, hold on, before we jump to conclusions, let’s understand the bigger picture. Over the past year, this IT marvel saw a dip of -33% in returns.
The reason is muted revenue growth of 5% in a couple of quarters in the 2022-23 financial year that created selling pressure on investors who have already made a decent amount of money from this midcap stock but overall the revenue showed a positive trend.
Tata ELXSI recently reported a net profit of Rs 938 crore for the March 2023 quarter, which is an all-time high profit. The revenue growth was 27% compared to the preceding year, earning Rs 3,145 crore. This resilience in challenging times speaks volumes about Tata ELXSI’s mettle.
Research analysts are buzzing with anticipation, suggesting a potential return of up to 28-30% in the long run. Tata ELXSI’s shares could potentially be trading around the Rs 9100 mark by 2025. Now, that’s an exciting glimpse into the crystal ball!
Fundamental Analysis of Tata ELXSI
Tata ELXSI’s financial prowess is no joke. You can understand that with the help of revenue growth and profit growth statistics.
Revenue growth: Tata Elxsi’s revenue is generated from three major sectors –
- Media & Communications
The visual representation below showcases the revenue generation from three distinct industry verticals within Tata Elxsi for the fiscal year 2022-23.
In the fiscal year 2022-23, its annual revenue skyrocketed by 27%, showcasing remarkable resilience even in challenging times.
Here’s the revenue growth journey in a nutshell:
|Financial Year||Revenue (in crores)||Revenue Growth|
Yes, you might notice a slight dip in 2022-23 compared to the previous year. You can blame it on the US market slowdown, a significant player in Tata ELXSI’s business.
Profit growth: The profit growth trend is heading north as well. Over the last 3 years, Tata ELXSI has showcased a positive trend, defying the slowdown in the US economy and Europe:
- 2020-21: Net Profit of Rs 368 crores
- 2021-22: Net Profit of Rs 550 crores
- 2022-23: Net Profit of Rs 755 crores
And the Earning per Share (EPS) has been on an upward trajectory, climbing to 121% in 2023 from 59% in 2021 which is more than double.
Tata ELXSI’s Return on Equity (ROE) is also on a boom, growing by around 36.8% year-on-year for the last 5 years.
Technical Analysis of Tata ELXSI
If you check 10 out of 15 moving averages are screaming “buy” for a 1-month view.
And, the 200-day moving average is also singing the same tune. It’s showing a bullish sign as the current stock price is trading above the 200MA as it is getting support from buyers after the past corrections.
If you look at momentum oscillators, they are showing a Neutral sign including the RSI chilling at 55.35. This means the Tata ELXSI’s price may get corrected in the days to come but in the long run, it will rise again.
Tata ELXSI Business Analysis and Growth Prospects
A significant chunk of Tata ELXSI’s business comes from the United States with 42% of the total revenue share, followed by Europe with 36% revenue share, 17% business comes from India and the rest of the world contributes 5% of the revenue. The revenue map paints a vivid picture of its global presence.
The visual representation below showcases the accomplishments and significance of three distinct industry verticals within Tata Elxsi for the fiscal year 2022-23.
Now you can see, EPD is the maximum revenue generator for Tata Elxsi with 87% of the total revenue share followed by IDV and SIS.
All the segments are showing consistent growth over the last 5 years.
Regarding future performance, you must note that one industry in which Tata Elxsi is highly active is Artificial Intelligence (AI). AI has garnered the most enthusiasm these days and experts are of the opinion that even a modest portion of Tata Elxsi’s revenues holds the promise of getting exponential growth over the next decade.
However, Tata Elxsi has pointed out that the uncertainty in the macroeconomic landscape has impacted the demand. The company has observed delays in project ramp-ups and anticipates that client expenditures will remain cautious in the coming couple of quarters.
But you need not worry about Tata Elxi’s business performance if you are investing with a long-term vision of 7 years to 10 years.
Risks of Investing in Tata ELXSI
- Market Competition – Intense competition from other industry players could impact Tata Elxsi’s market share and pricing power.
- Economic Uncertainty – Macroeconomic factors like economic downturns or geopolitical events may lead to reduced client spending, affecting Tata Elxsi’s business operations.
- Client Dependency – Tata Elxsi’s high reliance on the US market exposes the company to risks if these clients reduce their business or switch to competitors due to whatever reasons
- Technological Disruption – Rapid advancements in technology could render Tata Elxsi’s solutions obsolete, which requires spending a big chunk of profits on constant innovation to stay competitive.
- Talent Retention – Attracting and retaining skilled professionals is essential for Tata Elxsi’s growth, and competition for top talent in the industry poses challenges.
- Regulatory Changes – Evolving regulations in the industry or different regions could impact Tata Elxsi’s business operations and strategies.
Tata ELXSI has stood firm against the headwinds, maintaining revenues and profits with a resolute spirit. With experts showing potential returns reaching up to 28-30%, the future looks intriguing. By the time we hit 2025, Tata ELXSI might just be trading around Rs 9100.
We have also analyzed other Tata stocks for future price growth, you can go through the below articles for further details.
- Tata Power Share Price Target
- Tata Steel Share Price Target
- Tata Motors Share Price Target
- Tata Teleservices Maharashtra Limited (TTML) Share Price
In the past 3 years, Tata ELXSI showcased a remarkable 25% revenue growth and a 43% profit growth. The company’s EPS and ROE reflect its sturdy financial foundation.
Absolutely! The market sentiment holds immense power in steering stock price movements. Just look back at the impact of US recession news on Tata ELXSI’s price.
You should invest in any stock when you have full confidence on your own research rather relying on the other person’s opinion.
Mutual funds are the best way to invest and diversify your funds and reduce the chances of major loss in case stock doesn’t perform well.
Tata ELXSI’s strategic embrace of new technologies, coupled with its global partnerships, positions it for accelerated growth in the years to come.