From mint · Pranati Deva · · 1m 40s
Tata Elxsi Q2 Results: IT Stock Soars 7%
Tata Elxsi shares surge 7% after Q2 results beat expectations, but brokers caution on sustained growth.
In brief
Tata Elxsi shares surge 7% after Q2 results beat expectations, but brokers caution on sustained growth. Tata Elxsi shares rose 7% following Q2 revenue growth of 15% and net profit increase of 10% year-on-year, though Motilal Oswal maintains a 'Sell' rating. Originally reported by mint.
Tata Elxsi Q2 Results
Tata Elxsi shares jumped 7% after quarterly revenue rose 15% and net profit increased 10% year-on-year.
Sequential Growth Beat Expectations
Constant-currency revenue growth of 2.3% exceeded expectations of 1.5%.
Motilal Oswal Rating
Motilal Oswal retained its Sell rating, citing risks to sustained growth and margin recovery.
Share Price Trend
Shares surged 7% to ₹ 3,664.20 on BSE, gaining 19% over the past week and 8.5% over the past month.
Long-Term Decline
The stock remains 38% below its 52-week high of ₹ 5,949.95, recorded in January 2.026.
Key Financials
Net profit rose 10% to ₹ 170 crore, revenue grew 15% to ₹ 1,056 crore, and total income increased 13% to ₹ 1,090 crore.
CEO Commentary
CEO Manoj Raghavan noted revenue growth of 3.4% QoQ in rupee terms and 2.3% QoQ in constant currency.
Cost Concerns
Employee benefit expenses rose 15% to ₹ 620 crore, and total expenses increased 13% to ₹ 851 crore.
Motilal Oswal Target
Motilal Oswal raised its target price to ₹ 2,970, implying a 13% downside from Tuesday's closing price.
European Market Concerns
Subdued automotive demand in Europe remains a key constraint on growth, with delayed decisions affecting spending.
Brokers' Outlook
Motilal Oswal expects revenue growth to improve in H2 FY27 but warns of slow deal conversion.
The main idea
Tata Elxsi shares rose 7% following Q2 revenue growth of 15% and net profit increase of 10% year-on-year, though Motilal Oswal maintains a 'Sell' rating.
