Tata Alexi Limited (TEL) is an IT company whose market capitalization 53,547.15 crore. Tata Alexi shares rise from 3809.60 8,576, resulting in a multibagger return of 125.12 per cent in one year. So far in 2022, the stock has given 45.51 percent return to its shareholders. last traded price of stock 8,576 is higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Sharekhan has given Buy Call Rating to the shares of Tata Alexi with a target price of Rs. 9,750, indicating a 13 percent upside potential from the stock’s previous trading price.
Sharekhan said in a note that “Tata Alexi Limited’s (TEL) Annual Report for FY 2022 focused on its differentiated offerings and design-led approach in select industries, customer-led platform business, offshore Focused on distribution capabilities and favorable sector tailwinds. TEL focuses on design thinking and application of digital technologies in high growth areas, which is expected to see strong growth driven by increasing ERD spend. According to Zinov, Indian ERD Services The provider’s share is expected to grow from $16 billion in 2021 to $58 billion in 2031, at a CAGR of over 13%. Wide range of digital engineering-led services, strong platform portfolio, deep domain expertise and solid offshore delivery capability Given this, we believe Tata Alexi will be one of the major beneficiaries among global peers from the current volatility in ERD spending.
“Management remains optimistic on the sustenance of higher offshore mix in FY2023E (90% in Q4FY2022), given its robust delivery model and cost-savings to customers, although we believe FY2023E due to open voyage in the mixture will reduce marginally. Growth in startups is expected to slow, given increasing layoffs, hiring freeze and strong industry-wide fresher hiring (during FY2022). In addition, the company has brought in a wage increase in January 2022 (which covers 65-70% of the workforce) from July (implemented 7-8% pay hike in 2021), which will benefit TEL in FY2023E. We believe the company will continue to deliver industry-leading margins in FY 2023E led by pricing, higher offshore mix, pyramid balance and currency tailwinds,” the brokerage said.
Sharekhan in its research report stated that “TEL is well positioned to capture the market opportunities in selected industries given its unique capabilities in design based engineering. TEL’s USD Revenue and Earnings have increased in FY2022-FY2024E compared to FY2022-FY2024E. Expected to have a CAGR of 23% and 20% respectively. Under our coverage, Tata Alexi is the only company whose stock performance (up 22%) has been influenced by interest rate hikes by the US Federal Reserve, rising inflation in developed markets, Russia’s CNX has outperformed IT (down 17%) in the last three months despite the -Ukraine conflict and a possible slowdown in the US. On the CMP, the stock is trading at 78x/67x its FY2023E/FY2024E earnings, which is costlier However, we continue to prefer TEL given its strong growth potential, market share advantage, superior margin profile, differentiated capabilities in digital engineering and strong balance sheet (51% of cash and investments total assets). Maintains Buy rating on TEL with Revised Price Target (PT) 9,750.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.