TATAELXSI - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

📊 Core Financials Analysis

Profitability & Returns

ROE: 39.3% and ROCE: 60.0% are exceptional — strong indicators of operational efficiency and capital utilization.

EPS of ₹16.4 is low relative to the stock price of ₹6,090, suggesting weak earnings yield.

PAT growth of 36.5% QoQ (₹29.8 Cr. vs ₹27.8 Cr.) shows solid momentum, but absolute profit remains modest for its valuation.

Debt & Liquidity

Debt-to-equity ratio of 0.00 — completely debt-free, which is a major strength.

Dividend yield of 1.23% adds modest income potential.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 372 Extremely overvalued vs. industry PE of 29.1

P/B Ratio ~133.8 Astronomically high — suggests speculative pricing

PEG Ratio 8.63 Indicates overvaluation relative to growth

Intrinsic Value Far below CMP Due to low EPS and extreme valuation multiples

🏢 Business Model & Competitive Advantage

Business Model: Tata Elxsi specializes in design and technology services for automotive, media, healthcare, and embedded systems.

Strengths

Niche positioning in high-growth segments like autonomous vehicles and digital healthcare.

Strong innovation pipeline and IP-led solutions.

Weaknesses

Valuation is disconnected from fundamentals.

EPS and PAT are not commensurate with market cap.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹5,000–₹5,300 range would offer better margin of safety, especially near support levels and 52-week low.

Long-Term View

High-risk, high-reward stock — suitable only for aggressive growth investors.

Avoid fresh entry at current levels due to valuation excess.

Hold if already invested, but monitor earnings growth and margin sustainability.

Would you like a peer comparison with L&T Technology Services or KPIT Technologies to evaluate alternatives in the engineering R&D space?

Edit in a page