Shares of Tata Elxsi snapped their seven-day gaining streak on Wednesday. The Tata Group stock, which rose 16% in the last seven sessions slipped over 6% in the current trading session. The stock fell to Rs 8,405 on BSE today against the previous close of Rs 8970.35. Despite today's profit-booking, the stock is overbought on charts with a RSI of 89.3. In the last two sessions, the stock climbed a huge 26 per cent.
The Tata Group stock is trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
However, this year, the Tata Elxsi stock is down 4%.
The large cap stock hit a 52-week low of Rs 6406.60 on June 4, 2024 and a 52 week high of Rs 9191.10 on December 18, 2023. The stock opened lower at Rs 8900 on BSE today. Total 0.90 lakh shares of the firm changed hands amounting to a turnover of Rs 76.79 crore on BSE.
Tata Elxsi stock has a one-year beta of 0.5, indicating very low volatility during the period.
Kotak Institutional Equities has a sell call on the Tata stock with the brokerage citing inflated valuations. In its latest note, the brokerage said near-term headwinds for Tata Elxsi have been ignored by investors so far, leading to steep valuation premium.
Tata Elxsi at 61 times one-year forward earnings is more than adequately factoring in all positives, said Kotak.
“The stock was expensive even before the rally. We believe that Tata Elxsi's revenue growth would improve through the rest of FY2025E, as large OEM engagements ramp up. However, challenges in the rest of the portfolio persist: (1) weak spending in the media and communications vertical and (2) middling presence in healthcare, along with deferrals by large clients," Kotak said.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One has advised invetros to be cautious on the counter.
"It is advisable to maintain caution after the rise and wait for consolidation above Rs 9,100 for the next leg of the rally," said Krishan.
Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi sees the support level at Rs 8,600 and resistance at Rs 9,100.
The stock can rise up to Rs Rs 9,350 post a decisive close above Rs 9,100 level, he said adding that the expected trading range will be between Rs 8,000 and Rs 9,400 in the short term.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking sees immediate resistance on the counter at Rs 9,100 and support at Rs 8,600.
Tata Elxsi is a subsidiary of Tata Sons, holding company of the Tata Group. It provides design and technology services across industries including automotive, broadcast, communications, healthcare, and transportation. The company aims to help customers reimagine their products and services through design thinking and the application of digital technologies such as IoT (Internet of Things), cloud, mobility, virtual reality and artificial intelligence.