Tata Elxsi shares jumped 12% today; how strong is this upside?

Shares of Tata Elxsi Ltd on Monday rose sharply in fag-end trade, extending their gains for the sixth consecutive session. The stock surged 11.91 per cent to hit an intraday high of Rs 7,930.65. It eventually settled 8.88 per cent higher at Rs 7,715.95 on BSE. At this price, the scrip has climbed 10.84 per cent in the past one month but slipped 11.78 per cent on a year-to-date (YTD) basis.

The counter saw high trading volume today as around 50,000 shares changed hands. The figure was higher than the two-week average volume of 5,381 shares. Turnover on the stock came at Rs 37.87 crore, commanding a market capitalisation (m-cap) of Rs 48,052.19 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 78.91. 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 56.04 against a price-to-book (P/B) value of 17.61. Earnings per share (EPS) stood at 126.45 with a return on equity (RoE) of 31.43.

"If someone wants to go for the BTST (Buy Today, Sell Tomorrow), one can look out for Tata Elxsi. Keep a stop loss at Rs 7,700 for this trade and expected near-term target price of Rs 8,200," Brijesh Singh of StockAxis told Business Today TV.

With that being said, Kotak Institutional Equities has given a 'Sell' rating on the stock while pegging it at a fair value of Rs 5,500.

On the earnings front, the Tata Group company reported a 3 per cent dip in net profit, at Rs 184 crore, for the first quarter ended June 2024 (Q1 FY25). Profit came at Rs 189 crore in the year-ago period.

Revenue from operations in Q1 FY25 increased 9 per cent year-on-year (YoY) to Rs 926 crore as against Rs 850 crore in the corresponding period last year.

As of June 2024, promoters held a 43.92 per cent stake in the firm. Tata Elxsi provides design and technology services across industries including automotive, broadcast, communications, healthcare and transportation.