1 Tata Group stock jumps from ₹1 lakh to ₹12 crore after bonus shares: Buy after Q3?

Tata LXC Q3 Earnings

For the quarter ending December 2022 or Q3FY23, the company posted revenue from operations of 817.7 crore as compared to 635.4 Cr posted in the same quarter last year or Q3FY22, representing a YoY growth of 28.7%. While Tata Elxsi said its total quarterly revenue crossed US$100 million for the first time. Company reported EBITDA 246.9 cr in Q3FY23 against 210.8 Cr in Q3FY22, representing a YoY growth of 17.1%, while its EBITDA margin expanded to 30.2% YoY and 9.0% QoQ growth.

Tata Elxsi Registers Profit Before Tax (PBT) 240.1 Cr in Q3FY23 as compared to Rs. 200.3 Cr posted in the year-ago quarter, representing a YoY growth of 19.9%, while the company reported a profit after tax (PAT) 194.7 crore in the quarter ending December 2022 151.0 crore in the quarter ended December 2021, registering a growth of 29.0%. EPS grew by 11.7% QoQ and 29.0% YoY to Rs. 31.26, according to the company.

EPD, IDV, and SIS all experienced strong Q-o-Q growth of 5.1%, 25.5%, and 9.3%, respectively. Helped by key acquisitions and market share growth in EVs, Software Defined Vehicles and adjoining segments, Tata Elxsi said its transportation segment posted excellent growth of 12% QoQ and 33.2% YoY. New product engineering, digital health and regulatory services contributed to the 28.4% annual growth in the healthcare sector. New breakthroughs in Android TV and AdTech, as well as platform-based agreements with operators, fueled 14.7% growth in the media and communications segment.

Commenting on the company’s performance, Mr. Manoj Raghavan, CEO & Managing Director, Tata Elxsi, said, “We delivered a quarter of steady growth in a seasonally weak and challenging quarter for the technology industry and macro-economic uncertainty in our key markets. We are seeing strong and continued growth in the automotive and adjacent segments of transportation, led by our differentiated EV and digital capabilities. We have won multi-year deals in EV and Software Defined Vehicle Architecture in the automotive space, and made a strategic entry into a global OEM software organization.”

“Both our Healthcare and Media & Telecom businesses saw some impact of decision delays, furloughs and a smaller quarter. We’ve done a good job of protecting our business and positioning ourselves strongly for upcoming strategic deals. In the media and telecom verticals, we have won strategic platform-based deals with operators in media and communications, and have driven new wins, particularly in the AdTech space. The Healthcare & Lifesciences vertical saw new product development deals, including a renal home care platform for a leading US medical device company. Our design business continues to win design digital deals for the company across our key verticals. This is creating opportunities for large development projects and next-generation digital applications, including AR/VR and AI enabled entertainment experiences,” said Mr. Manoj Raghavan.

“For us, it has been a quarter focused on positioning ourselves strongly for the future with our unique design-based capabilities, expansion in our customer base, and the employees we made last quarter and before Extravagant investment has been used in the additions. The attrition rate declined for the third quarter in a row, even as we continue to invest in bringing in the right expertise to deliver exceptional results for our clients. This is helping us drive growth in the growing number of strategic accounts and new offerings we are bringing to market. We have also invested in setting up a digital engineering center in Frankfurt to support our growth in Germany and Europe. We enter the final quarter of the financial year with a strong order book and a healthy deal pipeline and a differentiated Design Digital positioning across key markets and industries.”

Tata Elxsi share price and bonus share history

Shares of Tata Elxsi on BSE on Friday 6662.10 each level, up 0.99% from previous close 6596.80. The stock touched a 52-week high 10,760.40 (17/08/2022) and 52-week low 5,708.10 on (26/12/2022). Tata Elxsi stock is up from today An all-time high of 62,572.62% was reached on 5 April 1996 at a current market value of 10.63. Therefore, an investor would have received a total of 9,407 shares if he had invested 1 lakh at the starting price level of the stock 10.63.

Data on BSE indicates that on September 18, 2017 the company declared Bonus Shares at 1:1 ratio. Therefore, after the declaration of bonus shares, the total number of shares held by that investor would have increased to 18,814. Consequently, based on the current market price, the total value of the 18,814 shares is now more than Rs. 12.53 crores. As a result, investment of Tata Eleksi made in 1 lakh 12 crores if an investor had invested in the stock 26 years ago.

Should you buy Tata Elxsi shares after Q3 earnings?

Research analysts at broking firm KRChoksey said, “TELX is currently trading at valuations with P/E multiple of 58.63x / 47.52x on FY23E/FY24E earnings. We expect strong deal momentum across verticals, new Adding new customers across geographies, higher focus on IDV especially in design-based digital projects and a multi-year tailwind in EPD and hence we are assigning a P/E multiple of 64x.FY24 Estimated EPS 8,884 per share, an upside of about 35% from CMP, to arrive at a target price of Rs 138.8 per share. Accordingly, we maintain our “Buy” rating on the stock.”

On Friday, research analysts at HDFC Securities said, “Tata Elxii (TELX) growth was driven by IDV business, but growth for TELX has been muted. Growth in the third quarter was led by the design segment, which contributed around Rs. Contributed half and revenue was also boosted by strong growth in the transportation vertical. These were offset by sequential declines in the media and communications and medical verticals on furlough impact. Transportation from deal wins and pipeline (including a strategic entry into the new European OEM program) The vertical is expected to maintain momentum. Design business traction is driven by integrated EPD deals, supported by recent restructuring and sharpened customer focus. TELX’s near-term outlook for the Media & Communications vertical remains soft and Medical Devices The outlook for TELX is of normalized growth, impacted by the extended timeline of EU medical device regulation. While TELX’s valuation multiple has come down, it still remains above comfort levels (currently at 49x and 39x FY24E and FY2020). 25E earnings) factoring in 24% EPS CAGR over FY22-25E. At current valuations, the implied USD revenue growth is >21% CAGR over FY22- 32E. Hold SELL on TELX with a TP of Rs 6,000 based on 40x Sep-24E EPS.”

Research analysts at Sharekhan said, “The management has indicated that the demand outlook for media and communications and healthcare and medical devices will remain soft, but they are more optimistic on healthcare and medical devices to recover faster. Both were hit by furloughs and fewer working days. The total headcount decreased by 72, taking the total workforce to 11,607. The company plans to add new people over the next two quarters and 400 per quarter for the next four quarters. Will add -500 engineers. On the demand scenario, among top 10 clients, managements said they are seeing some large deals not moving forward and are seeing caution in the market. Clients prefer to take a wait-and-see approach. The company said it will take a few quarters for them to get some clarity. We expect the outlook for FY24 to be uncertain due to global headwinds and any recovery is likely to be gradual. continuing macro uncertainties for And given the shortfall in earnings growth path, we reduce rating and revise our PT to Rs. 6,185. We recommend investors to wait for better entry points for long term investments.”

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