Tata Group Stock To Sell: Large Cap Declares 700% Dividend, 6 Analysts Give Sell, 4 Give Buy

Large cap Tata Group company operating in IT Software sector, Tata Elxsi share plunged sharply in last 2-weeks by 8.03% and 4.22% in last 1-week after its revenue growth missed street estimates for the quarter ended March, 2024. Last trading price of Tata Elxsi share on BSE is Rs 7130.00 per share with intraday gain of 0.51%. The company declared highest ever dividend in its history on March 23, 2024. Public sector undertaking Life Insurance Corporation of India (LIC) has 1.97% stake in Tata Elxsi as the insurance giant holds 1,226,008 shares of the company. Tata Elxsi Ltd share gained by 13.38% in last 1-year. More details below:

Tata Elxsi Declares Highest Ever Dividend In Its History: As per the regulatory filing of Tata Elxsi dated April 23, 2024, "Board of Directors has recommended a dividend of 700% at Rs. 70/-, per equity share of Rs. 10 each, for the financial year 2023-24, subject to tax, which shall be paid/dispatched on or after the seventh day from the conclusion of the 35 th Annual General Meeting, subject to the approval of the shareholders of the Company."

Tata Elxsi Quarterly Performance: Tata Elxsi declared a decline of 4.6% quarter-on-quarter (QoQ) in net profit for the March quarter to Rs 196.93 crore as against Rs 206.4 crore reported in the Oct-December quarter of FY2024. Its bottomline remained 2.32% lower than Rs 201.5 crore declared an year ago. The IT giant's revenue from operations too declined 1% for Q4 of FY2024 TO Rs 905.9 crore as compared to Rs 914.23 crore declared in the preceding quarter, but remained higher than Rs 837.91 crore announced an year ago. EBIT margin witnessed growth to 25.8% for the quarter under review as against 26.8% in the last quarter amid operational efficiencies.

Tata Elxsi Share Performance: The 52-week high price of the stock is Rs 9191.10 apiece (as on 18/12/2023) and 52-week low price is Rs 6,264.20 apiece (27/04/2023), respectively. Its market cap is Rs 44,398.74 crore. Tata Elxsi has a PE of 55.44 and EPS (TTM) of 33.15.

Tata Elxsi Dividend History: The large cap stock declared 24 dividends since June 21, 2001. In past 12 months, Tata Elxsi declared an equity dividend of Rs 60.60 per share. At the current share price of Rs 7129.30, the IT stock has a dividend yield of 0.85%, according to Trendlyne.

Tata Elxsi Bonus Share: The company announced so far only 1 bonus issue since September 18, 2017. It was declared in the proportion of 1:1 with ex-bonus date set as September 18, 2017.

Brokerages Viewpoint: HDFC Securities has maintained sell call on Tata Elxsi shares with target price of Rs 6435 per share. Leading brokerage house Morgan Stanley slashed Tata Elxsi's Earnings per Share (EPS) estimates by 3.9% and 5.4% for FY 2025 and 2026 and issued underweight rating to Tata Elxsi shares. JPMorgan reduced target price on Tata Elxsi to Rs 5,800 from Rs 6,000 earlier, as it also issued underweight rating. Out of 10 analysts who have been tracking the stock, 6 recommended sell call while the remaining assigned buy call to Tata Elxsi.

About: Tata Elxsi started business on May 5 1989 in Bangalore, the Silicon Valley of India, to develop and promote applications of electronics, embedded systems, and software. The Mission was to foster innovation in the fast-emerging IT market and accelerate the adoption of leading-edge technologies, as per the company's website.

Disclaimer:

The stock has been recommended by leading brokerage firm HDFC Securities, Morgan Stanley, and JPMorgan. Goodreturns, the Author, and ICICI Securities will not be held responsible for any losses due to decisions taken based on the article. Goodreturns.in recommends readers to verify with certified experts before taking any investment decision.