Tata Elxsi dips 15% after Q2 result
Published On: Tuesday, October 18, 2022 | By: Team KnowMyStock
Shares of Tata Elxsi hit a three-month low of Rs 7,204, falling 7.50 percent on the BSE in Tuesday's intra-day trade, in an otherwise weak market. The stock has slipped 15 percent in the past two trading days after the Tata Group company reported a sequential decline in its net profit. The Tata Group firm reported a 39.1 percent rise in net profit at Rs 174.3 crore in Q2, up from a year-ago period of Rs 125.3 crore. However, the earnings fell below market expectations. On October 14, the company said its revenue from operations grew 28 percent year-on-year to Rs 763.2 crore in the September quarter. Profit after tax grew 39.1 percent and the employee mark crossed 11,000 with 1,532 net additions in the quarter. Ebitda's profit margin came in at 29.7 percent.
The management said the company is gaining market share in both automotive and media & communications, especially in Europe. The numbers are muted in the region due to unfavorable currency movement. However, management highlighted that Media and Communication have seen some deferment and slowdown. It expects this to continue for one or more quarters as customers are cautious, majorly in US and Europe, owing to the inflationary environment. Management also indicated that deal closures are taking longer in the US and Europe due to the macro environment.
Morgan Stanley has an underweight call on the stock with a target price of Rs 5,800.
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