Tata Elxsi shares decline nearly 3% as Q1 net profit declines QoQ; brokerages see upto 20% downside

Tata Elxsi share price, Tata Elxsi Q1FY25 results: Shares of Tata Group’s newly listed player Tata Elxsi in early trade on Thursday fell nearly 3 per cent at day’s low to Rs 6930.45 on the company’s dismal performance in Q1FY25. For the April-June quarter, the company’s net profit fell 6.5 per cent sequentially to Rs 184.1 crore.

Revenue during the reporting quarter, though logged a 2.3 per cent sequential increase to Rs 926.5 crore, according to a regulatory filing.

In constant currency terms, the company clocked revenue growth of 2.4 per cent in Q1.

The company’s margin, a key measure of profitability, contracted by 160 basis points (bps) to 27.2 per cent for the June quarter.

The company registered Rs 252.3 crore in June-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA), marking a decline of 3.4 per cent on a sequential basis.

What should investors do with Tata Elxsi stock after Q1FY25?

Global brokerage JP Morgan remains underweight on the stock and has slashed the target to Rs 5,700 from Rs 5,800, implying potential downside of nearly 20 per cent from the previous close. As per the brokerage, Tata Elxsi has announced the capacity expansion for cables with an investment outlay of Rs 380 crore and this could result in an incremental topline of Rs1500 crore.