Mehabe score: 5 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Tata Elxsi is amongst the world’s leading providers of design and technology services across industries including Automotive, Media, Communications and Healthcare. Tata Elxsi provides integrated services from research and strategy, to electronics and mechanical design, software development, validation and deployment, and is supported by a network of design studios, global development centers and offices worldwide.
Main Points
Geographical Presence
The company is present across the world with Europe accounting for majority of revenues at 36.5%, followed by Americas (36%), India (13%) & rest of world contributing to rest 14.5% of revenues. #Site:TATAELXSIMain Symbol:TATAELXSI
Stock trades at 4487.0, above its 50dma 3811.79. It also trades above its 200dma 2797.89. The stock remains bullish on techicals
The 52 week high is at 4500.00 and the 52week low is at 885.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 29.69%
– has been maintaining a healthy dividend payout of 50.11%
Weakness
– Stock is trading at 20.67 times its book value
-The company has delivered a poor sales growth of 11.18% over past five years.
Competition
– The industry trades at a mean P/E of 33.1x. Happiest Minds trades at the industry’s max P/E of 133.93x. TATAELXSI trades at a P/E of 76.5x
– Industry’s mean G-Factor is 3.7 while the mean Piotski score is 9.0. TATAELXSI has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 21.8%. The max 1- month return was given by Happiest Minds: a return of 60.28 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 558.0 cr compared to Rs 400.0 cr for period ended Jun 2020, a rise of 39.5%
Operating Profits reported at Rs 150.0 cr for period ended Jun 2021 vis-vis 93.0 for period ended Jun 2020 .
Operating Margins expanded 363.2 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 18.21 compared to Rs 18.49 for previous quarter ended Mar 2021 and Rs 11.06 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1984.0 cr for period ended TTM vis-vis sales of Rs 1826.0 cr for the period ended Mar 2021, a growth of 8.0%. The 3 year sales cagr stood at 7.5%.
Net Profit reported at Rs 413.0 cr for period ended TTM vis-vis sales of Rs 368.0 cr for the period ended Mar 2021, rising 10.9%.
Company recorded a healthy Net Profit CAGR of 12.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 437.0 cr for period ended Mar 2021 vis-vis Rs 256.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 30.0% compared to 30.0% over the last 3 Years. – The stock has given a return of 400% on a 1 Year basis vis-vis a return of 47% over the last 3 Years. – The compounded sales growth on a TTM bassis is 13% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 40% vis-vis a compounded profit growth of 15% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 12.07% vis-vis 12.62% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 38.08% vis-vis 38.03% for Dec 2020
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 29.69%
– has been maintaining a healthy dividend payout of 50.11% – Stock is trading at 20.67 times its book value
-The company has delivered a poor sales growth of 11.18% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 3811.79 and is trading at 4487.0, thus bullish price action wise.
