Tata Elxsi soars 11%, hits new high on strong December quarter results

Tata Elxsi share price soared 11 per cent to hit a new high of Rs 2,299 on the BSE on Wednesday after the company reported strong December quarter results (Q3FY21) with double digit quarter on quarter (QoQ) revenue growth and industry leading operating margins.

Tata Elxsi’s revenues increased 10.9 per cent QoQ at Rs 477 crore. In constant currency terms revenues grew 10 per cent QoQ mainly led by growth in transportation, broadcast & communication and healthcare segment. Ebit (earnings before interest and tax) margins increased around 300 basis points (bps) to 27.8 per cent. Profit after tax (PAT) increased 33.3 per cent QoQ to Rs 105 crore.

Going forward, the company is expected to report robust numbers based on multiyear large deals won by the company and ramp up of previous deals. In addition, the company's strategy to diversify into healthcare and broadband is bearing fruit.

The management said the company is seeing sustained recovery in the automotive market for the second consecutive quarter. This quarter has seen OEMs reinitiating key R&D programs, leading to resumption of projects as well as deals with Tier1 suppliers.

“We are entering the fourth quarter and a new year with the reinforced confidence of a strong deal pipeline across markets and industries, and capabilities in product engineering, design and digital, that makes our offerings more relevant and our market position stronger than ever before,” said Manoj Raghavan, Managing Director and CEO.

Tata Elxsi is amongst the world’s leading providers of design and technology services across industries including automotive, media, communications and healthcare.

At 09:46 am, the stock was trading 9 per cent higher at Rs 2,263 on the BSE, as compared to 0.52 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 1.31 million equity shares changing hands on the NSE and BSE, so far.