11 Jul , 2024 By : Debdeep Gupta
Tata Elxsi shares fell over two percent in early trade on July 11 as the Tata group firm reported a 3 percent decline in net profit for the first quarter of financial year 2024-2025.
The company posted a net profit of Rs 184 crore for the first quarter of financial year 2024-2025, against a net profit of Rs 188 crore in the year-ago period.
Revenue from operations grew 9 percent in the June quarter at Rs 926 crore as against Rs 850 crore in the same quarter last fiscal.
At 9.17 am, Tata Elxsi shares were quoting Rs 6,950.1 on the NSE, lower by 2.4 percent compared to the previous session's closing price.
Kotak Institutional Equities said Tata Elxsi's earnings show was marginally ahead of its estimates on revenue growth and profitability. Revenue grew 2.4 percent on a sequential basis, driven by large deal ramp-ups and likely strong performance at JLR.
The brokerage retained its Sell call, but bumped its target price up to Rs 5,500, indicating a downside of 22 percent. "The company has had tight controls on costs, focusing on operational efficiencies. We believe management would prioritize reinvestment toward growth initiatives and do not see a significant upside from current levels," it said.
International brokerage JPMorgan retained its Underweight call on Tata Elxsi, with a price target of Rs 5,800, implying a downside of around 18.5 percent from the previous close.
The healthcare arm declined as a result of delays in renewal from a large US client, while the bounce-back in transportation was led by large deals finally ramping up.
JPMorgan said that the positive surprise in Tata Elxsi's transport arm will be offset by the headwinds in the healthcare business. The brokerage cut its earnings estimate by 2-4 percent over FY25-27 as a result of higher tax rates.
0 Comment