Fri Jan 10 20:19:09 UTC 2025: ## Tata Elxsi Shares Plunge 8% After Disappointing Quarterly Results

**Mumbai, [Date of Publication]** – Shares of Tata Elxsi Ltd. plummeted 8.06% on Friday, closing at Rs 5,924 on the BSE, following the release of underwhelming third-quarter results. The company reported a 3.39% drop in net profit to Rs 199 crore compared to Rs 206 crore in the same period last year, despite a slight revenue increase of 2.72% to Rs 939.17 crore.

Analysts attributed the weak performance to a combination of factors. While the transportation vertical showed modest growth driven by large Asian and Japanese deals, the automotive sector in Europe and the US faced significant headwinds. Further impacting profitability was a decline in EBIT margin by 160 basis points to 23.5%, primarily due to salary increases and adverse currency fluctuations.

Kotak Institutional Equities, Morgan Stanley, and JP Morgan all expressed concerns about the company’s near-term outlook. Kotak cited challenging demand in the automotive vertical, leading them to cut FY2025-27 EPS estimates by 7-11%. Morgan Stanley lowered its target price to Rs 6,000 from Rs 6,500, while JP Morgan maintained an underweight rating with a revised target price of Rs 5,400. Both brokerages highlighted the disappointing sales and margins as a significant miss for the second consecutive quarter.

Despite the setbacks, Tata Elxsi aims to focus on growth in India, Japan, and emerging markets, while navigating challenges in Europe and anticipating a US market recovery. The company emphasized its commitment to operational efficiency and expansion in high-growth areas such as connected vehicles and digital engineering.

The stock’s performance reflects a broader negative trend; it is down 17% in the past six months. With limited growth visibility and high valuations, analysts predict continued underperformance in the near future.

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