Tata Elxsi Ltd.
NSE: TATAELXSITata Elxsi Ltd.: A 30-second snapshot
Tata Elxsi, an engineering R&D services company in the IT sector, trades at ₹4,126 — 38.24% below its 52-week high and below both the 50-DMA (₹4,271) and 200-DMA (₹5,116). Trailing PE of 40.8 is the highest among 6 tracked IT peers, while 5-year revenue CAGR of 5.8% trails the 5-year earnings CAGR of 27.8%. Analyst coverage stands at 15 analysts with a mean rating of 3.47 on a 1–5 scale (lower = more constructive).
P/E
40.8
Forward P/E
26.3
ROE
+21.3%
Debt / Equity
5.34
Profit Margin
+16.7%
Div. Yield
+1.8%
5Y ROE > 15%
4/5
5Y FCF > 0
4/5
Quality
56/100
News
8 headlines · 2 positive · 2 negative
Tata Elxsi Shares Slide 6% as Weak Outlook Overshadows Q4 - HDFC Sky
HDFC Sky
TATAELXSI: Strong Q4 revenue and margin growth, strategic AI adoption, and major deal wins drive momentum - TradingView
TradingView
Tata Elxsi falls 5% after Q4 results; brokerages stay cautious: Here's why - Business Standard
Business Standard
Persistent Systems, Tata Elxsi: Q4 results preview for two IT firms - Business Today
Business Today
Tata Elxsi Q4 Results: At Rs 220 crore, PAT meets Street expectations - Zee Business
Zee Business
Recent context
- ·Q4 FY26 PAT of ₹220 crore broadly met Street expectations, with QoQ revenue growth reported; however, management guidance for high-single-digit revenue growth prompted a sharp negative price reaction of 5–6% on results day.
- ·Business Standard and HDFC Sky both highlighted brokerage caution following Q4 results, with weak outlook cited as the dominant narrative despite the in-line quarterly profit figure.
- ·The stock has three nearby support levels at ₹4,090, ₹4,022, and ₹3,966, with resistance clustered at ₹4,347, ₹4,754, and ₹5,637 — the nearest resistance is 5.4% above current price.
Strengths
- +5-year earnings CAGR of 27.8% is among the strongest in the IT peer group, driven by sustained margin expansion in engineering R&D services.
- +ROE of 21.3% has exceeded 15% in 4 of the available years, and FCF has been positive in 4 of those years — indicating consistent capital generation.
- +Profit margin of 16.73% and a forward PE of 26.3 suggest the market prices in meaningful earnings recovery relative to the trailing multiple of 40.8.
- +Quality score of 63 ranks 2nd among 6 tracked IT peers, above HCL Tech (40), Wipro (46), and Tech Mahindra (46).
Weaknesses
- −Price is 38.24% below the 52-week high and 30.3% below year-ago levels, with the stock trading below both the 50-DMA and 200-DMA — a sustained multi-month downtrend.
- −Trailing PE of 40.8 is the highest among the 6 IT peers tracked; peers HCL Tech, Infosys, TCS, and Wipro trade at 14.6–18.5, creating a wide valuation gap relative to stocks with higher ROEs.
- −5-year revenue CAGR of 5.8% is materially below the 5-year earnings CAGR of 27.8%, indicating that profitability gains have not been accompanied by commensurate top-line growth.
- −Multiple brokerages moved to cautious stances post-Q4 FY26, citing weak forward guidance; the stock fell 5–6% on results day despite PAT meeting consensus estimates.
Open questions
- ?Does the 5-year earnings CAGR of 27.8% reflect a durable competitive position in automotive and media engineering R&D, or has a sector-specific upcycle been the primary driver?
- ?At a trailing PE of 40.8 versus large-cap IT peers at 14.6–25.3, what rate of revenue growth acceleration would be required to justify the current premium over the next 3–5 years?
- ?The D/E of 5.3 is atypical for an IT-sector company — what is the composition of this debt and what are the repayment terms relative to annual FCF generation?
- ?Given that the forward PE of 26.3 implies significant earnings growth versus the trailing figure, what are the specific business drivers (deal wins, new verticals, AI adoption) that analysts are pricing into that recovery?
Peer comparison: IT
Ranks 2 of 6 on qualityTechnical state
Current price
₹4,125.60
SMA 50
₹4,270.79
SMA 200
₹5,116.22
RSI (14)
43.1 (neutral)
From 52w high
-38.2%
1Y return
-30.3%
3M return
-21.4%
50-DMA
Below
200-DMA
Below
Algorithmic support levels
Algorithmic resistance levels
Risk flags
- highPrice is 38.24% below the 52-week high and down 30.3% over 12 months, trading 19.3% below the 200-DMA (₹5,116 vs current ₹4,126) — the stock has remained below both the 50-DMA (₹4,271) and 200-DMA for an extended period.
- medium5-year revenue CAGR of 5.8% is sharply below the 5-year earnings CAGR of 27.8%, indicating profitability gains have not been matched by top-line expansion. Management guidance for high-single-digit revenue growth keeps near-term revenue trajectory modest.
- mediumTrailing PE of 40.8 is the highest among the 6 IT peers tracked (peers range 14.6–25.3), with ROE of 21.3% ranking 4th of 6 — the combination of a sector-high valuation and mid-pack returns represents a notable premium-to-quality gap.
- mediumMultiple brokerages issued cautious stances following Q4 FY26 results; the stock fell 5–6% on results day and business press cited weak outlook as the primary driver despite PAT broadly meeting expectations.
- lowD/E of 5.3 is elevated relative to typical IT-sector norms, though the low-capex nature of the engineering R&D services model means absolute debt service may be limited; debtTrend is flat.
Cross-section contradictions
- 5-year earnings CAGR of 27.8% and ROE of 21.3% reflect strong historical profitability, yet the stock is down 30.3% over 12 months and 38.24% from its 52-week high — price action diverges materially from the earnings track record, suggesting valuation re-rating rather than fundamental deterioration.
- Q4 FY26 PAT met Street expectations and the TradingView report cited strong revenue and margin growth, yet news sentiment is 2 positive vs 2 negative out of 8 items, and brokerages moved to cautious stances post-results — indicating the market weighted forward guidance (weak) over backward results (in-line).
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.
Fundamentals & technicals: refreshed 25 Jun 2026 · refreshed daily at 01:00 IST
AI synthesis (narrative, snapshot, strengths/weaknesses, peer ranking): generated 17 May 2026 · rotates through NIFTY 500 every ~5 days