While the management expects H2 FY27 to be better than H1, the brokerage remain cautious about the sustainability of growth, given continued softness in European automotive demand and delays in deal closures. Transportation accounts for over 55% of the SDS segment, making the recovery in automotive spending critical to the company's growth trajectory. Further, Ebit margin at 19.7% was supported partly by cross-currency benefits and the reversal of previous one-off costs.
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Nirmal Bang Report
Following Tata Elxsi Ltd.'s September-ending quarter results, Nirmal Bang has reiterated its ‘Hold' rating on the stock, valuing it at an unchanged 25 times blended earnings per share of Rs 153, translating into a target price of Rs 3,825.
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According to the brokerage, Tata Elxsi delivered a sequential recovery in Q2 FY27, with revenue growing 2.3% QoQ and 7.8% YoY on a CC basis, supported by broad-based growth across its key verticals.
While the management expects H2 FY27 to be better than H1, the brokerage remain cautious about the sustainability of growth, given continued softness in European automotive demand and delays in deal closures.
Transportation accounts for over 55% of the SDS segment, making the recovery in automotive spending critical to the company's growth trajectory. Further, Ebit margin at 19.7% was supported partly by cross-currency benefits and the reversal of previous one-off costs.
While the management expects gradual margin improvement through H2, the sustainability of operating leverage remains a key monitorable.
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