Tata Elxsi shares down by 5% after disappointing Q4 results

Tata Elxsi said that it was impacted by its media and communication vertical which declined by 4.6% in constant currency (CC) terms in Q4 and saw a one-time ramp-down by a customer.

While attrition fell by 50 bps to 12.4% in Q4 from 12.9% in Q3, the company’s headcount increased by 178 to end the year at 13,399. It said 25% of its entire talent base will be AI-ready by Q3 FY25. It has partnered with NVIDIA, AWS, Microsoft, Google, Intel, and Brainchip.

Here’s what brokerages have to say on the stock:

Morgan Stanley

Morgan Stanley has an underweight call on Tata Elxsi with a target price of Rs 6,860 and said the March quarter was a miss but the management sounded constructive on revenue growth in FY25. However, good commentary may not be enough given burden of higher expectations and steep valuations, it said while reducing EPS estimates for FY25-26 to 3.9% and 5.4%

Choice Broking

Domestic broking firm Choice Broking has maintained a ‘buy’ call on Tata Elxsi with a revised target price of Rs 8,095, which signals an upside potential of 15% for the stock. The brokerage said that the management is committed to growth backed by strategic relationships built over the years with key customers, the qualitative change in revenues towards OEMs and SDV programs, entries into new operators and marquee healthcare logos, investments and talents in hiring, investments in strategic technology areas in AI and a strong deal pipeline.

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