Tata Elxsi shares fall 5% after Q3 results disappoints Street
Tata Elxsi shares price fell nearly 5% to Rs 7,807 in Wednesday's trade on BSE after the design and technology services company reported a 6% year-on-year (YoY) rise in third-quarter profit.
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The company's net profit rose to Rs 206 crore for the quarter ended December 31 from Rs 195 crore a year ago. Revenue from operations rose to Rs 914 crore from Rs 818 crore a year ago.
The company's transportation segment, which contributes about 47% of its revenue, grew 15.6% year-on-year, aided by deal wins and ramp-up of Software Defined Vehicle engagements. For Q3FY24, the transportation segment grew by 2.7% quarter-on-quarter (QoQ).
For the same period, the healthcare division grew by 4.6% QoQ, driven by new product engineering and regulatory services. The media and communications segment grew marginally by 0.6% QoQ.
Following the Q3 results, global brokerage firm JPMorgan maintained an 'Underweight' rating on Tata Elxsi but slashed the target price to Rs 6000 from Rs 6200 earlier.
The Q3 print was in line in terms of revenues but it missed on margins. There is a dual challenge on the growth front, and it looks like margins seem to have peaked.
The global investment bank remains underweight, as the valuation burden is excessive.
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At 10.56 a.m., the scrip was trading 3.8% lower at Rs 7,878 on BSE. However, the stock has surged nearly 20% in the past one year and over 200% in the last three years.
«As we step into the last quarter of this financial year, the confidence of our customers in our differentiated Design Digital proposition and delivery excellence, and a strong deal pipeline
