Tata Elxsi reports 39% rise in profit; here’s how investors react to Q4

Shares of Tata Elxsi rose 5% on Thursday as investors cheered the earnings reports of the technology services firm, which beat market expectations. The Tata group company has posted a 38.9% year-on-year increase in net profit at ₹160 crore in the fourth quarter ended March 2022. The company had reported a net profit of ₹115.16 crore in the same period last year. The revenue from operations surged 31.51% to Rs 681.7 crore in Q4 FY22, from Rs 518.39 crore in the year-ago quarter, the company said in a release which came post market hours on Wednesday.

On sectoral front, Tata Elxsi’s transportation business reported a revenue growth of 37.9% Y-o-Y, driven by large deal won by differentiated electric vehicle segment. The healthcare business rose 72.4% Y-o-Y over FY21, powered by digital and connected health, regulatory services and innovation for next-generation medical devices and services.

Boosted by strong earnings, the board of the company also declared final dividend of 425% at ₹42.50 per share for the financial year 2021-22, subject to the approval of the members at the forthcoming annual general meeting.

Reacting to Q4 earnings, Tata Elxsi shares opened with a gain of 2.33% at ₹7,990 against the previous close price of 7808.05. The stock jumped as much as 4.9% to hit an intraday high of ₹8,190.95. There was spurt in volume trade as 65 thousand shares changed hands over the counter as compared to two-week average volume of 33 thousand scrips. The market capitalisation of the company climbed to ₹49,284.95 crore.

Tata Elxsi shares have given solid returns to its investors in the past one year on the back of strong earnings and an all-round performance across business units, industries and geographies. The stock price has risen 160% over one year period, with shares surging from ₹3,048 on April 22, 2021, to ₹8,190.95 in intraday today. The largecap stock has rallied 33% in past six months, 7% in last one month, and 34% on year-to-date (YTD) basis.

Commenting on Q4 earnings, Manoj Raghavan, CEO and MD, Tata Elxsi said, “This has been the strongest year of growth in the company’s history and an all-round performance across business units, industries and geographies. We continue to execute strongly on our growth aspirations with over 7.4% QoQ CC revenue growth and 10% QoQ PBT growth in Q4 FY22.”

“I am delighted to exit FY22 with all-round growth in revenues, margins and customer additions. We are entering a new financial year with a strong deal pipeline and the continued confidence of our customers in the value of our integrated design and product engineering, and the impact on their offerings and customer experience,” he added.

Tata Elxsi delivered segment leading performance for FY22 and highest annual growth in its history, with profit growing by 49.3% Y-o-Y to ₹549.7 crore. This was the first time when the company’s profit crossed ₹500 marks. The revenues from operations rose 35.3% to ₹2,470.8 crore.