Shares of Tata Elxsi Ltd paused their seven-session winning streak on Wednesday. The stock tanked 8.23 per cent to settle at Rs 8,231.90. At this price, it has gained 18.78 per cent in the past one month. Although, the scrip has shed 5.89 per cent on a year-to-date (YTD) basis.
Kotak Institutional Equities said Tata Elxsi Ltd at 61 times one-year forward earnings is more than adequately factoring in all positives. Calling it an excellent company but with inflated valuations, the domestic brokerage -- in its latest note -- said near-term headwinds for the company have been ignored by investors so far, leading to steep valuation premium. It retained its 'Sell' rating on the stock while pegging it at a fair value of Rs 5,500.
On technical setup, a few analysts suggested investors to maintain 'caution' after the recent rise. One can consider booking some profit, one of them said.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking said investors should be cautious, given the recent uptick. "One can consider booking some profit and buying it around Rs 8,000 for an upside target of Rs 8,600 in the near term. Keep stop loss placed at Rs 7,800," Singh added.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "It is advisable for investors to maintain caution after the recent rise and wait for consolidation above Rs 9,100 for the next leg of the rally."
The counter saw high trading volume on BSE today as around 1.46 lakh shares changed hands. The figure was higher than the two-week average volume of 63,000 shares. Turnover on the stock came at Rs 123.95 crore, commanding a market capitalisation (m-cap) of Rs 51,265.34 crore.
The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 67.96. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 65.10 against a price-to-book (P/B) value of 20.46. Earnings per share (EPS) stood at 126.45 with a return on equity (RoE) of 31.43.
Tata Elxsi is a subsidiary of Tata Sons, a holding company of the Tata Group. It provides design and technology services across industries including automotive, broadcast, communications, healthcare and transportation.
As of June 2024, promoters held a 43.92 per cent stake in the company.