Business
Economics
Finance
Market Analysis
Investment
Financial Performance
Profitability
Revenue Growth
Tata Elxsi is down by 14% in 2 days 🥵
Even though the profits are 40% up YoY🫣
All this just because of ~6% drop in QoQ profits❓🤯
What to do❓ Read on👇 #TataElxsi
Even though the profits are 40% up YoY🫣
All this just because of ~6% drop in QoQ profits❓🤯
What to do❓ Read on👇 #TataElxsi
A. Financial performance
While revenue grew by 5.1% QoQ,
EBITDA dipped by 4.6%, PAT by 5.6%
And EBITDA Margins by over 3.1%
Mgmt has not re-assured about revival of margins yet
While revenue grew by 5.1% QoQ,
EBITDA dipped by 4.6%, PAT by 5.6%
And EBITDA Margins by over 3.1%
Mgmt has not re-assured about revival of margins yet
B. Is the fall justified?
There is hardly any dip in momentum of revenue growth
Margins and thus, profitability has dipped
But the consistent high margins over the last 2 years were the reason why market gave Elxsi a P/E of over 100 once
Now it is down to 66.2
There is hardly any dip in momentum of revenue growth
Margins and thus, profitability has dipped
But the consistent high margins over the last 2 years were the reason why market gave Elxsi a P/E of over 100 once
Now it is down to 66.2
C. What is a fair PE?
It is very difficult to say what is fair, but let us take 30x PE for long term estimates
If we expect a IRR of 15% over our investments,
Elxsi's earnings need to compound at 24.6% for next 10 years (>9 times)
It is very difficult to say what is fair, but let us take 30x PE for long term estimates
If we expect a IRR of 15% over our investments,
Elxsi's earnings need to compound at 24.6% for next 10 years (>9 times)
D. Is this achievable?
I would say YES, given the mgmt capability and futuristic technology they work on
But Margins should stay stable for that
And you should be expecting a return of 15% IRR (not like 10x in 3 years)
Disc. Not investment advice
I would say YES, given the mgmt capability and futuristic technology they work on
But Margins should stay stable for that
And you should be expecting a return of 15% IRR (not like 10x in 3 years)
Disc. Not investment advice
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