Shares of Tata Elxsi Ltd have jumped nearly 37% so far in 2022 (YTD), outperforming the BSE IT index, which has lost over 27% during the same period. The IT company’s profit and revenue has climbed big deals thanks to cloud-based platforms and artificial intelligence used to improve products and customer experience.
In addition, strong demand for specialized design services to be used in making electric vehicles (EVs) has helped IT Stock Growth of more than a third this year, even as inflation concerns have battered the sector globally.
IT company’s revenue from operations grew 30% year-on-year (YoY) 725.9 crore for the first quarter ended June 2022, and its net profit jumped over 63% from the year-ago quarter 184.7 crores.
,Tata Alexi Consistently strong performer achieving >6% QoQ CC growth (with continued margin expansion) for eight consecutive quarters. Its Q1FY23 revenue growth was strong at 6.5% QoQ CC (constant currency). Analysts at ICICI Securities said in a note, growth was volume-led and driven by transportation and healthcare, while media and communications were below the company’s average.
The Tata Group firm’s Q1FY23 EBITDA margin of 32.8% (+30 bps QoQ) was a firm beat on analysts’ estimates, despite senior employees’ salary hikes during the quarter. The company’s management has said that in case of slowdown and budget cuts, the impact on Tata Alexi is likely to be less than that of the industry as the company operates at competitive rates enabled by its high offshore presence and important strategic client projects, which But it was working.
“We expect Tata Alexi to grow at 24%/15.3% in FY23E/FY24E, which will be higher than the industry growth rate,” said an ICICI Securities note.
According to Chief Executive Officer (CEO) Manoj Raghavan, orders from Tata Alexi remain strong despite warning signs in the global economy. “From all our key customers, we have really heard no intention of reducing the budget,” Raghavan said in a conference call. The Bengaluru-based firm may increase its existing 10,000 workforce by 50% in the year through March 2023. Including fresh graduates and experienced workers, he said.
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