Tata Elxsi multibagger | share price target

Tata ELXSI multibagger

Is Tata Elxsi multibagger stock? What is the share price target for long term? Is it a good buy over long term or mid term or short term? We analyze and discuss about these points. Three years Tata elxsi share price history Image credit: Screener

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Is Tata Elxsi multibagger stock?

Let’s discuss about various aspects of the company and see if this is worth buying. As usual we will analyse past performance, current standing and future growth potential.

Key Parameters:

  • Tata elxsi stock price (30 Jan, 2018) : Rs 1083
  • Market cap (RS Cr): 6,750.14
  • P/E: 33.09
  • Book Value (Rs): 91.02
  • Industry P/E: 23.19
  • EPS (TTM): 32.76
  • Price/Book: 11.91
  • Div Yield.(%): 1.48%

Source: Tata Elxsi MoneyControl

Tata elxsi company profile:

Tata Elxsi is a global design and technology services company, headquartered in Bangalore. This is supported by a network of design studios, development centers and offices worldwide.

Tata Elxsi works with leading OEMs and suppliers in the automotive and transportation industries for R&D, design and product engineering services from architecture to launch and beyond. It brings together domain experience across Infotainment, Autonomous Driving, Telematics, Powertrain, and Body electronics, along with technologies such as artificial intelligence, analytics, cloud and IoT. Tata Elxsi is accredited with Automotive SPICE Level 5 certification and is a member of leading consortium such as AUTOSAR and OPEN Alliance.

Visit Pharma industry in India here.

With the advent of Internet of Things (IoT), Robotics and AI, etc., the focus would be on adopting such technologies and blending it with solutions such as OTT, driverless cars and automated testing to cater to various ecosystems, including consortium, R&D institutions, start-ups and silicon vendors.

Source: Official site.

Tata Elxsi Ltd address: Tata Elxsi has Headquarters in Bangalore.

Tata Elxsi Limited
ITPB Road, Whitefield
Bangalore 560048
India
(CIN-L85110KA1989PLC009968)

Fundamentals and Earnings:

Let’s get a look at key financial numbers or Tata Elxsi results and see what do they indicate.

Here is the quarterly results.

Tata ELXSI multibagger Q

As this is evident from above snap, quarterly results are constantly improving over the period of time.

Let’s look at compounded sales, profit and return for last 3 ,5 and 10 years.

Tata ELXSI multibagger growth

Again this is quite evident that recent growths are very impressive.

Image Credit: Screener

Let’s look at the balance sheet next.

Tata ELXSI multibagger BS

Image Credit: Moneycontrol

Cash flow and Profitability ratios:

Let’s look at another two major fundamental factors on Tata Elxsi multibagger stock.

Tata ELXSI multibagger cash

Here is the key financial ratios over the period of time.

Tata ELXSI multibagger ratios

When we look at the cash flows, net cash flow is always positive and key financial numbers are quite good.

With all consideration you can safely say this Tata Elxsi multibagger stock is fundamentally strong.

Tata elxsi Product and services:

Tata Elxsi provides range of product and service in high end technology segment.  Here is the list.

  1. Industrial Design And Innovation
  2. Product Engineering
  3. Big Data Analytics
  4. Internet of Things
  5. Animation and VFX
  6. Systems Integration

Tata Elxsi ltd caters into following industry.

  1. Automative
  2. Broadcast and Media
  3. Communications
  4. Consumer Products
  5. Healthcare
  6. Semiconductor
  7. Transportation

Tata Elxsi news:

Here are some recent news that can have impact in earnings and thus may influence Tata elxsi share price target down the line.

ZEE5 partners with Tata Elxsi for multi-platform front-end application development of its new digital entertainment platform.

Tata Elxsi has driven the integration of ZEE5 with the video backend, multi-lingual front-end user experience and multi-CDN networks. At the device level, the Tata Elxsi teams have powered the next generation voice-based user interfaces and integration with multiple DRMs on Android, iOS, Web as well as Android TVs.

Quartz 2018 – HMI cluster

In the recently held CES 2018, Tata Elxsi showcased digital cluster concept using Kanzi. With the aim to move away from the traditional dial clusters, Tata Elxsi designed an intuitive digital cluster based on the theme ‘Quartz’ – which represents qualities like sharp, clear, energy and strength. Source Tata Elxsi site.

Current Valuation:

One of the most important factor we need to consider before deciding on buy is to check how much the stock has performed over last one year along side the industry movement during the same time.

When we look at 5 years graph, it shows stock was trading around Rs 100 at the beginning of 2013. Then it kept rising at unprecedented speed to reach Rs 1200 at the beginning of 2016. So to say, it gave 12 times return in three years. Unsurprisingly it moved to consolidation mode for next one year. Slowly and steadily it again started moving north after that.

At present the stock has move around RS 700 to RS 1100 in last one year which doesn’t categorized as sharp movement or unsustainable movement. The technical looks good at this point for any entry on this Tata Elxsi multibagger stock.

Another important factor is PE and PB ratios. When we check the PE, it stands at 33 compared to industry PE ratio of 23. Similarly when you look at P/B value this is sitting at 12. Both these key ratios points to bit over valuation of this stock.

But when we look at the ROE and ROCE they are around 30 which means company can sustain this kind of movement provided growth remains intact.

Management:

First of all Tata Elxsi multibagger stock has the seal of trust from TATA group. This speaks in huge volume. Second major factor is Tata group has experience and expertise of running the most valued IT company, TCS in the same sector. So management are well capable of taking the company to much larger level.

Tata elxsi share price dividend: The company has a good dividend track records. Tata Elxsi has declaring early dividends for last 5 years. For the year ending March 2017, Tata Elxsi has declared an equity dividend of 160.00% amounting to Rs 16 per share.

Additionally Tata elxsi bonus share was last announced in 2017 in the ratio of 1:1.The share has been quoting ex-bonus from September 18, 2017.

Future outlook:

As stated many times earlier future outlook is the most important factor while deciding which stock to buy.

Tata Elxsi is focused on futuristic technologies that will soon move to mass market. Having capable management carrying right experience and expertise will definitely lead the company in growth path over longer period of time.

Tata Elxsi has already integrated V-Nova’s award-winning technology within the set-top-box (STB) of a satellite TV operator in Europe, enabling rapid deployment and immediate benefits.

V-Nova PERSEUS offers the benefits of next-generation codecs, on available encoders and decoders, at the same time providing substantial reductions in processing power requirements.

Recently Tata Elxsi has tied up with Airport Authority of India.

“We will be primarily responsible to set the way finding and information design guidelines for all AAI airports coming up in the future,” the global design and technology consultancy said in its filing.

Conclusion:

Based on all the points mentioned and analysis done above we can derive following conclusion.

  • Company has given stupendous performance in the past and fundamentals are very good
  • At present company is not over valued and can sustain the growth going forward
  • Company growth drivers are intact and it is making inroad into technologies that are futurist in nature.

So what could be the Tata elxsi share price forecast for next few years?

Even if company has given impressive return in the last one year this is one of the best stock from IT industry for a longer term view. This stock has the potential to give good returns in next 3-5 years period of time. So we would advise not to think much of Tata elxsi share price target or share price forecast but stick to it for a long term view.

Check Indian IT industry overview for 2018 here.

If you feel this post about Tata Elxsi multibagger useful to you and this can benefit others then do share with your friends.

Also visit Goldstone Infratech multibagger and Penny stocks for 2018 – Bodhtree Consulting.

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