Tata stock returns 121% in one year, up 43% so far this year; Do you want to buy?

Tata Multibagger Stock: Shares of IT company Tata Elxsi Limited (TEL) have rallied more than 43 per cent so far this year, doubling investor money in the past one year. Shares of Tata Elxsi shares rose from Rs 3809.60 to Rs 8,445, resulting in a multi-bagger return of 121.29 per cent in one year. The stock’s last trading price of Rs 8,445 is higher than the moving average of 5 days, 20 days, 50 days, 100 days and 200 days. Its 52-week low was 3,555.05 / share and its 52-week high was 9,420 / share.

Revenue is expected to be up to 15%

Tata Elxsi Limited’s Annual Report FY2022 focuses on its diverse offerings and design-led approach across select industries, subscriber-based platform business, offshore delivery capabilities and favorable sector tailwinds. Shares of Tata Elxsi have been given a buy call rating by Share Khan, with a target price of Rs. 9,750, indicating a 15.5 per cent increase in the stock’s closing price.

Rationale

Sherkhan, a brokerage firm, said in a statement that Tata Elxsi Limited’s (TEL) Annual Report FY2022 focuses on different offers and design-led approaches across selected industries, customer-centric platform business and offshore delivery capabilities. Sector Tailwinds. TEL focuses on the design thinking and application of digital technologies in high growth verticals, which is expected to achieve strong growth through rising ERD costs. According to Sinov, the share of Indian ERD service providers is expected to increase from $ 16 billion in 2021 to $ 58 billion in 2031, indicating a CAGR of over 13%. Given the wide range of services led by digital engineering, strong platform portfolio, in-depth domain expertise and solid offshore delivery capabilities, Tata Elxsi is confident that we will be one of the major beneficiaries of global peers from ERD spending.

“Management continues to be optimistic about the strong delivery model of the high offshore mix in 2023E and the cost savings for customers, but we believe this mix will be slightly lower in 2023E as travel begins. Attrition is expected to continue in view of the increasing layoffs in startups, the freeze on hiring, and new hiring across the strong industry (fiscal year 2022). In addition, the company introduced wage increases in January 2022 (65-70 percent of the workforce) from July (implementing a 7-8 percent wage increase in 2021), which will benefit TEL in FY2023E. Led by pricing, high-offshore mix, pyramid balancing and currency tailwinds, we believe the company will continue to deliver industry-leading margin for the 2023 financial year, ”said Brokerage.

According to the ShareKhan report, Tata Elxsi is well-positioned to capture market opportunities across select industries, taking into account the unique capabilities of design-led engineering. Its USD earnings and earnings are likely to be 23% and 20% CAGR in FY22 and FY24, respectively. “Under our coverage, Tata Elxsi is the only company in the world to have surpassed CNX IT (down 17 per cent) over the past three months, despite rising US Federal Reserve interest rates and rising inflation in developed markets.” Says.

Tata Elxsi stock is trading at a FY2023E / FY2024E return of 78x / 67x, which is expensive. However, with the strong growth potential of Tata Elxsi, market share gains, excellent margin profile, diversified capabilities in digital engineering and strong balance sheet, Share Khan continues to grow. The depreciation of the rupee and / or adverse currency movements will adversely affect its earnings. In addition, the report added that the reverse of the offshore effort mix would affect its margins.

Disclaimer: The expert views and investment tips in this Daily News Hunt report are theirs, not those of the Website or its management. Users are advised to check with certified experts before making any investment decisions.

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