Tata Elxsi posts stable Q3 results; should you buy, sell or hold the Tata group stock?

Tata Elxsi (TATAELXSI) shares were under pressure on Wednesday a day after the Tata group design and technology services company reported a stable set of financial results for the October-December (Q3 FY24) period. The Tata Elxsi stock fell by as much as Rs 386.3, or 4.7 per cent, to Rs 7,807.4 apiece on BSE, after foreign brokerages JPMorgan and Morgan Stanley reduced their targets for the scrib by around three per cent after the earnings announcement.

At 9:49 am, Tata Elxsi shares traded were weaker by Rs 330.2, or 4.0 per cent, for the at Rs 7,863.5 apiece.  

Tata Elxsi Q3 FY24 results

After market hours on Tuesday, the Tata group company posted a sequential increase of about three per cent in consolidated net profit to Rs 206.4 crore for the quarter ended December 2023.  

While its quarterly revenue grew to Rs 914.2 crore for the December quarter from Rs 881.7 crore the months ago, its earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 2.4 per cent on a quarter-on-quarter basis to Rs 270.1 crore, according to a regulatory filing.  

The company’s margin, a key measure of profitability, contracted to 29.5 per cent in Q3 from 29.9 per cent in Q2.  

Should you buy, sell or hold Tata Elxsi shares?

Morgan Stanley maintained an 'underweight' rating on Tata Elxsi after the Tata group company reported its results, and revised its target for the stock to Rs 7,300 from Rs 7,500 apiece. 

While Tata Elxsi's results fell short of Morgan Stanley’s expectations, the brokerage said the quality of growth could have been better with a higher expansion in the embedded product division (EPD).

JPMorgan retained its 'underweight' rating on the stock and brought down its target to Rs 6,000 from Rs 6,200 apiece. 

Tata Elxsi share price: Past performance

In a year, shares of Tata Elxsi have gained over 17 per cent, in line with headline index Nifty 50's 18 per cent rise. 

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