TATAELXSI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | TATAELXSI | Market Cap | 25,728 Cr. | Current Price | 4,130 ₹ | High / Low | 6,735 ₹ |
| Stock P/E | 37.0 | Book Value | 488 ₹ | Dividend Yield | 1.82 % | ROCE | 29.9 % |
| ROE | 23.6 % | Face Value | 10.0 ₹ | DMA 50 | 4,476 ₹ | DMA 200 | 5,138 ₹ |
| Chg in FII Hold | 2.52 % | Chg in DII Hold | -0.89 % | PAT Qtr | 220 Cr. | PAT Prev Qtr | 159 Cr. |
| RSI | 39.0 | MACD | -64.4 | Volume | 2,80,691 | Avg Vol 1Wk | 3,98,239 |
| Low price | 3,966 ₹ | High price | 6,735 ₹ | PEG Ratio | -13.4 | Debt to equity | 0.05 |
| 52w Index | 5.91 % | Qtr Profit Var | 27.8 % | EPS | 101 ₹ | Industry PE | 21.6 |
📊 TATAELXSI (Tata Elxsi Ltd.) shows strong profitability metrics with ROE of 23.6% and ROCE of 29.9%, supported by low debt-to-equity (0.05). EPS of ₹101 provides earnings visibility, and quarterly PAT growth of 27.8% (₹220 Cr vs ₹159 Cr) highlights operational momentum. However, valuations are stretched with a P/E of 37.0 compared to industry average of 21.6, and a negative PEG ratio (-13.4) indicates poor growth prospects relative to price. Dividend yield of 1.82% adds some income support. Technical indicators show weakness with RSI at 39.0 and MACD at -64.4, reflecting bearish sentiment. Institutional activity is mixed, with FII inflows (+2.52%) but DII outflows (-0.89%).
💰 Ideal Entry Price Zone: ₹4,000 – ₹4,100 (near support levels and below 50 DMA).
📈 Exit / Holding Strategy: Hold for 2–4 years; consider profit booking near ₹4,600–₹4,700 resistance unless growth metrics improve. Long-term compounding potential depends on sustaining profitability and reducing valuation premium.
✅ Positive
- Strong ROE (23.6%) and ROCE (29.9%) highlight efficiency.
- Quarterly PAT growth of 27.8% shows earnings momentum.
- EPS of ₹101 provides earnings visibility.
- Dividend yield of 1.82% adds income stability.
- FII holdings increased (+2.52%), showing foreign investor confidence.
⚠️ Limitation
- High P/E (37.0) compared to industry average (21.6).
- Negative PEG ratio (-13.4) indicates poor growth prospects.
- Weak technical indicators (RSI 39.0, MACD -64.4).
- DII holdings declined (-0.89%), showing reduced domestic support.
📉 Company Negative News
- Stock trading below DMA levels reflects medium-term weakness.
- Valuation premium compared to industry peers.
📈 Company Positive News
- Strong quarterly profit growth and EPS strength.
- Foreign institutional investors increasing stake.
- Dividend yield provides steady income support.
💻 Industry
- IT and design services sector trades at PE 21.6.
- Industry supported by demand for digital engineering and product design.
🔎 Conclusion
TATAELXSI is a fundamentally strong company with high ROE/ROCE and consistent earnings growth, but valuations remain stretched. Entry near ₹4,000–₹4,100 offers better risk-reward. Hold for 2–4 years with profit booking near ₹4,600–₹4,700. Long-term attractiveness depends on sustaining profitability and improving growth metrics to justify premium valuations.