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<p>Tata Elxsi: We downgrade Tata Elxsi (TELX) to REDUCE (ADD earlier), based on diminishing margin of safety at 43x FY23E and following an in-line Q1 (both revenue and margin). While we remain positive on the company's prospects and growth leadership in ER&amp;D (24/26% revenue/EPS CAGR over FY21-24E), the unfavourable risk-reward can be construed from (1) concentrated growth pockets with ~25% of business driving ~50% of growth (IDV and medical devices-EPD), (2) reducing growth premium vs. ER&amp;D peer, and (3) the fact that its margin is currently at a peak (32.8% EBITDA margin adj.</p>
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Tata Elxsi: We downgrade Tata Elxsi (TELX) to REDUCE (ADD earlier), based on diminishing margin of safety at 43x FY23E and following an in-line Q1 (both revenue and margin). While we remain positive on the company's prospects and growth leadership in ER&amp;D (24/26% revenue/EPS CAGR over FY21-24E), the unfavourable risk-reward can be construed from (1) concentrated growth pockets with ~25% of business driving ~50% of growth (IDV and medical devices-EPD), (2) reducing growth premium vs. ER&amp;D peer, and (3) the fact that its margin is currently at a peak (32.8% EBITDA margin adj.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Tata Elxsi, L&T Infotech

India

Tata Elxsi Limited manufactures computers and workstations besides providing system design, software development and integration services. The Group supplies its products to a number of industries, including the automotive, metals, consumer products, finance, IT & Communications, energy, chemicals, engineering, pharmaceuticals, entertainment and agro industries.

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Tata Elxsi Ltd (TELX IN)

HSIE Results Daily: Tata Elxsi, L&T Infotech

We downgrade Tata Elxsi (TELX) to REDUCE (ADD earlier), based on diminishing margin of safety at 43x FY23E and following an in-line Q1 (both...

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