– Tata Elxsi’s stock fell 4% after Kotak Institutional Equities retained a bearish call on the company
– Kotak retained a “sell” call on Tata Elxsi with a target price of ₹5,500, indicating a 38.69% downside from the previous day’s closing price
– The company’s stock price had gained 26% in the last two days, making it expensive even before the rally
– Kotak believes revenue growth will improve through the remaining FY2025 as engagements with large original equipment manufacturers ramp up
– However, the company faces headwinds in its revenue segment, with 34% of revenue coming from affected tier 1 suppliers
– The brokerage sees weaknesses in areas such as spending in media and communications vertical, healthcare segment, and deferment of large clients
– Tata Elxsi’s valuations are stretched at 61 times one year forward price to earnings
– Shares of Tata Elxsi fell 4.96% to an intraday low of ₹8,526