Tata Elxsi rises 8% in 4 days; HDFC Securities upgrades to Add from Reduce

Tata Elxsi's stock advanced for the fourth consecutive session, rising nearly 8 per cent; HDFC Securities, in a report dated September 9, 2025, upgraded the stock to 'Add' from 'Reduce'

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Tata Elxsi shares climbed 5.5 per cent on Wednesday and logged an intra-day high at ₹5863.4 per share on BSE. At 11:38 AM, on BSE, Tata Elxsi’s share price was up 5.22 per cent at ₹5,847.05 per share. The stock advanced for the fourth consecutive session, rising nearly 8 per cent. In comparison, the BSE Sensex was up 0.46 per cent at 81,475.34.

 

The market capitalisation of the company stood at ₹36,422.77 crore. The 52-week high of the stock was at ₹8,140 per share, and the 52-week low was at ₹4,601.05.

 

HDFC Securities, in a report dated September 9, 2025, upgraded the stock to ‘Add’ from ‘Reduce’ with a revised P/E multiple to 35x (32x earlier) and a target price of ₹5,700, based on 35x Sep-27E earnings per share (EPS). 

 

The brokerage cited improving growth visibility in the transportation vertical, strong deal wins in media and communications, and long-term opportunities in healthcare, though margin recovery is expected to remain gradual. 

 

The company’s transportation segment is stabilising, led by the Jaguar Land Rover account and strategic wins with original electric manufacturers (OEMs) such as Mercedes-Benz, Suzuki, and a European player ($50 million deal). A notable shift in revenue mix from tier 1 suppliers to OEMs—now at 70/30 per cent

mix compared to the reverse three years ago—offers greater predictability and is expected to move toward an 80/20 per cent split. Analysts project a 13 per cent revenue compound annual growth rate (CAGR) in the vertical over FY25–28, reaching $300 million run-rate in FY27.

 

In media and communications, the company secured a $100 million multi-service contract along with two other large deals despite near-term pricing pressure. Margin recovery is expected through higher internal utilisation. OTT industry headwinds and insourcing by incumbents remain risks, but deal momentum reflects strong client confidence.

 

The healthcare vertical, though currently impacted by US tariffs and funding cuts, remains a high-potential area, with Tata Elxsi targeting 20–25 per cent long-term revenue contribution as against 12 per cent now), given its industry-leading medtech capabilities. 

 

Overall, HDFC Securities raised revenue estimates by 1–2 per cent, cut EPS forecasts by 1–3 per cent due to margin pressures, and expects the company to deliver a 10 per cent/12 per cent revenue/EPS CAGR in FY25–28, as compared to 5-year CAGR of 14 per cent/24 per cent. The stock, trading at 36x/31x FY27/28E EPS, is seen as attractive compared with its 10-year average multiple of 36x.