TATAELXSI - Investment Analysis

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

Investment Rating: 4.3

📊 Fundamental Analysis

Tata Elxsi is a high-quality mid-cap tech stock with strong profitability but stretched valuations

ROE (39.3%) & ROCE (60.0%): Outstanding capital efficiency — among the best in the IT sector.

Debt-to-Equity (0.00): Debt-free, ideal for long-term resilience.

Dividend Yield (1.23%): Modest but consistent.

P/E (372) vs Industry P/E (29.1): Extremely overvalued on trailing earnings.

PEG Ratio (8.63): Indicates expensive valuation relative to growth.

Book Value (₹45.5) vs Current Price (₹6,090): P/B ratio ~134 — very high, typical of premium tech stocks.

📈 Technical & Price Trend Insights

Current Price: ₹6,090

DMA 50 / DMA 200: ₹6,179 / ₹6,327 — price is below both, indicating bearish momentum.

RSI (42.8): Neutral zone, no strong reversal signal.

MACD (-40.2): Bearish crossover.

Volume: Slightly below average — low conviction.

💰 Ideal Entry Price Zone

Based on valuation and technical support

Entry Zone: ₹5,600–₹5,850 This range aligns with recent support levels and offers a better margin of safety. Below ₹5,600, it becomes a strong accumulation zone.

🧭 If You Already Hold the Stock

Exit Strategy / Holding Period

Hold for 5–7 years if you believe in Tata Elxsi’s leadership in automotive, AI, and embedded systems.

Partial Exit near ₹7,500–₹8,000 if valuations remain stretched and growth slows.

Exit Trigger: If ROE drops below 30% or PEG remains above 5 for 2+ quarters.

Analyst Sentiment

ICICI Securities: Target ₹4,420, “Sell” rating

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Consensus Target: ₹5,577 — downside risk from current levels

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Long-Term Forecast

2025: ₹7,270–₹7,558

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2027: ₹9,744–₹10,307

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2030: ₹13,994–₹15,030

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📌 Summary

Metric Value Verdict

ROE / ROCE 39.3% / 60.0% Excellent

PEG Ratio 8.63 Overvalued

Debt-to-Equity 0.00 Very low risk

Dividend Yield 1.23% Modest

P/E vs Industry 372 vs 29.1 Extremely overvalued

Entry Price Zone ₹5,600–₹5,850 Safer entry

Exit Strategy ₹7,500–₹8,000 Partial exit zone

Would you like a comparison with Persistent Systems or LTTS to explore better-priced engineering tech stocks?

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