Check Before You Invest : Tata Elxsi Ltd

BSE: 500408 NSE: TATAELXSI ISIN: INE670A01012

| Sector: IT & ITES | Industry: IT - Software

Snapshot

Q.1 Which industry/sub-sector does Tata Elxsi Ltd belong to?

Tata Elxsi Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q.2 Is Tata Elxsi Ltd a good quality company?

Tata Elxsi Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Tata Elxsi Ltd undervalued or overvalued?

Tata Elxsi Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Tata Elxsi Ltd a good buy now?

Tata Elxsi Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Tata Elxsi Ltd?

Tata Elxsi Ltd revenue growth is 5% for FY-2025, which is below its 5-year CAGR of 18.29%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Tata Elxsi Ltd?

Tata Elxsi Ltd Return on capital employed is 39.09% for FY-2025, which is below its 5-year historical median of 46.6%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Tata Elxsi Ltd?

Tata Elxsi Ltd Return on Asset is 23.39%, which is below its 5-year historical median of 26.79%, indicating deteriorated asset utilization efficiency.

Q.4 Return on Equity (ROE) of Tata Elxsi Ltd?

Tata Elxsi Ltd Return on equity is 29.45% for FY-2025, which is below its 5-year historical median of 34.62%, indicating the business is making worse use of its shareholders capital.

Q.5 Cash conversion cycle of Tata Elxsi Ltd?

Tata Elxsi Ltd Cash conversion cycle is 81 days, in line with its 5-year historical median of 80 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	1.11	1.2
ROE	29.45	34.62
ROCE	39.09	46.6
Cash Conversion Cycle	81 days	80 days

Q.6 Gross Profit margin of Tata Elxsi Ltd?

Tata Elxsi Ltd Gross profit margin which is the profit after deduction of direct costs, is 30.4% for FY-2025, which is below its 5-year median of 32.3%, indicating decreasing margins.

Q.7 Operating Profit Margin of Tata Elxsi Ltd?

Tata Elxsi Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 26.12% for FY-2025, which is below its 5-year median of 29.48% indicating decreasing margins.

Q.8 Net Profit Margin of Tata Elxsi Ltd?

Tata Elxsi Ltd Net Profit Margin is 21.05% for FY-2025, is below with its 5-year median of 22.25%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	30.4	32.3
Operating Profit Margin	26.12	29.48
Net Profit Margin	21.05	22.25

Q.9 Debt to Equity ratio of Tata Elxsi Ltd?

Tata Elxsi Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.11, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Tata Elxsi Ltd?

Tata Elxsi Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tata Elxsi Ltd?

Promoters hold 43.90% of the Tata Elxsi Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Tata Elxsi Ltd vs industry peers?

Tata Elxsi Ltd revenue CAGR is 18.29%, compared to the industry median CAGR of 10.86%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	5	10.9
Gross Profit Growth	-1.3	19
Operating Profit Growth	-7.1	NAN
Net Profit Growth	-0.9	22

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.11	0.5
ROE	29.45	5.83
ROCE	39.09	6.79
Cash Conversion Cycle (days)	81.31	47

Valuation & price assessment

Q.1 Stock return of Tata Elxsi Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 15.9% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	15.9%	3.2%	-14.8%	-29%

Q.3 Valuation ratios of Tata Elxsi Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	40.97	59.79	47.37
Price to Book	8.47	20.02	2.63
Price to Sales	6.85	13.59	4.79
EV to EBITDA	23.36	40.46	16.48

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