TATAELXSI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | TATAELXSI | Market Cap | 26,871 Cr. | Current Price | 4,309 ₹ | High / Low | 6,735 ₹ |
| Stock P/E | 38.6 | Book Value | 488 ₹ | Dividend Yield | 1.74 % | ROCE | 29.9 % |
| ROE | 23.6 % | Face Value | 10.0 ₹ | DMA 50 | 4,346 ₹ | DMA 200 | 5,006 ₹ |
| Chg in FII Hold | 2.52 % | Chg in DII Hold | -0.89 % | PAT Qtr | 220 Cr. | PAT Prev Qtr | 159 Cr. |
| RSI | 54.7 | MACD | -35.2 | Volume | 2,82,623 | Avg Vol 1Wk | 2,37,837 |
| Low price | 3,945 ₹ | High price | 6,735 ₹ | PEG Ratio | -14.0 | Debt to equity | 0.05 |
| 52w Index | 13.1 % | Qtr Profit Var | 27.8 % | EPS | 101 ₹ | Industry PE | 20.7 |
📊 Core Financials
- Revenue & Profit: Quarterly PAT ₹220 Cr. vs ₹159 Cr. previous quarter, showing strong sequential growth (27.8%).
- Margins: ROE at 23.6% and ROCE at 29.9% reflect solid efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.05 indicates negligible leverage, strong financial stability.
- Cash Flow: Stable due to consistent earnings and diversified design services portfolio.
💹 Valuation Indicators
- P/E Ratio: 38.6 vs Industry PE of 20.7 — trades at a premium, suggesting overvaluation.
- P/B Ratio: Price ₹4,309 vs Book Value ₹488 → ~8.8x, expensive relative to assets.
- PEG Ratio: -14.0 indicates weak growth outlook.
- Intrinsic Value: Current price appears stretched compared to fundamentals.
🎨 Business Model & Advantage
Tata Elxsi operates in design and technology services, focusing on automotive, media, healthcare, and product engineering. Its competitive advantage lies in niche expertise, strong client relationships, and innovation in embedded systems and design. However, valuations are demanding and growth outlook is modest.
📈 Technicals & Entry Zone
- RSI at 54.7 indicates neutral momentum.
- MACD negative (-35.2) suggests short-term weakness.
- Entry Zone: Attractive accumulation around ₹4,100–₹4,250 range.
- Long-term Holding: Suitable for investors seeking exposure to design-led technology services, but valuation risks must be monitored.
✅ Positive
- Strong ROCE (29.9%) and ROE (23.6%).
- Quarterly PAT growth of 27.8% sequentially.
- FII holdings increased (+2.52%).
⚠️ Limitation
- High P/E ratio (38.6) compared to industry average.
- P/B ratio (~8.8x) signals overvaluation.
- Negative PEG ratio (-14.0) indicates weak growth prospects.
📰 Company Negative News
- DII holdings declined (-0.89%).
- Valuation multiples significantly above industry norms.
🌟 Company Positive News
- Quarterly PAT improved from ₹159 Cr. to ₹220 Cr.
- FII holdings increased (+2.52%).
- Strong niche expertise in design and technology services.
🏭 Industry
Technology services industry PE at 20.7 reflects moderate valuations. Demand is driven by digital transformation, product engineering, and embedded systems. Competition remains intense, but Tata Elxsi’s niche positioning provides resilience.
🔎 Conclusion
Tata Elxsi demonstrates strong profitability, efficiency, and niche expertise, but current valuations are stretched with high P/E and P/B ratios. Long-term investors may consider accumulating in the ₹4,100–₹4,250 range, aligning with design-led technology growth while being cautious of valuation risks.
For broader context, you could explore a peer comparison or an industry outlook to complement this analysis.