Tata Elxsi Limited (TATAELXSI) AI Stock Analysis

• Market Cap: ₹331.48B
• Dividend Yield: 1.38%
• Average Volume (3M): 15.20K
• Price to Earnings (P/E): 57.1
• Beta (1Y): 1.33
• Revenue Growth: -1.19%
• EPS Growth: -17.92%
• Country: IN
• Employees: 12,969
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 17.50
• Shares Outstanding: 62,295,230
• 10 Day Avg. Volume: 16,408
• 30 Day Avg. Volume: 15,195
• PEG Ratio: -43.37
• Price to Book (P/B): 11.04
• Price to Sales (P/S): 8.47
• P/FCF Ratio: 39.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ₹6,560.00 ▲(21.21% Upside)

The score is primarily supported by strong financial quality (low leverage, solid ROE, and healthy cash-flow generation). Technicals are constructive with price above major moving averages and positive MACD, but overbought signals add near-term risk. The biggest constraint is valuation, with a high P/E and only a modest dividend yield.

Positive Factors

Balance Sheet Strength

Low leverage and a high equity ratio provide durable financial flexibility, allowing Tata Elxsi to fund R&D, absorb client volatility, and pursue selective M&A or strategic investments without stressing liquidity over the next several quarters.

Cash Flow Generation

Growing operating and free cash flows signal sustainable internal funding for capex, product development and shareholder distributions. Strong cash generation reduces reliance on external financing and supports medium-term strategic investments.

Diversified End‑Markets & Tech Capabilities

Exposure across automotive, healthcare, media and transport plus AI/ML/IoT expertise positions the firm to capture secular digital transformation demand, smoothing cyclicality and supporting multi‑year revenue opportunities through cross‑sector solutions.

Negative Factors

Recent EBIT Downturn

A recent negative EBIT indicates operating profitability pressures and potential execution issues. If sustained, it can erode margins, constrain reinvestment capacity and undermine the company's ability to convert revenue strength into durable profits over coming quarters.

Near‑term Revenue Contraction

A modest YoY revenue decline signals demand softness or contract timing risk. Given the project‑based revenue model, continued contraction could pressure utilization and backlog conversion, weighing on sustainable top‑line momentum over the next 2–6 months.

Earnings (EPS) Decline

An ~18% EPS decline points to margin compression or non‑operating impacts reducing shareholder returns. Combined with negative EBIT, weakening EPS reduces capacity for reinvestment and heightens sensitivity to further revenue or cost volatility in the medium term.

Tata Elxsi Limited Business Overview & Revenue Model

Company Description

Tata Elxsi Limited provides product design and engineering, and systems integration and support services in India, the United States, Europe, and internationally. The company operates through two segments, Software Development and Services; and Systems Integration and Support. It offers technology consulting, new product design, development, and testing services; and consumer insights and strategy, visual design and branding, product and packaging design, user experience design, service experience design, and transportation design, as well as content and 3D animation services. The company also provides engineering services for connected, autonomous, and shared and electric vehicles; consumer research, prototyping, and automotive exteriors and interiors styling services; body and chassis systems, driveline, and powertrain systems; automotive software engineering services; validation service; and AI-enabled smart annotation platform for automotive industry. In addition, it offers shopping, bill payment, gaming, movie watching, and video conferencing services; distribution and delivery solutions; ad monetization services; OTT/IPTV and test automation platforms; intelligent network and transformation operations; network orchestration, SDN/SD-WAN, android TV, and RDK services for communications industry; integrated design and engineering, and regulatory compliance services, as well as digital health products and solutions. Further, the company provides technology solutions and services for smart home appliances, electric off-highway vehicles, autonomous vehicles, connected systems, integrated digital rail systems, and semiconductors. Additionally, it implements and integrates systems and solutions for computing, CAD/CAM/CAE/PLM, broadcast, virtual reality, storage, and disaster recovery; and provides professional services for the maintenance and support of IT infrastructure. The company was incorporated in 1989 and is headquartered in Bengaluru, India.

How the Company Makes Money

Tata Elxsi generates revenue through a diverse range of services tailored to the needs of various industries. The company primarily earns money through project-based contracts, which can include consulting, design, and development services in sectors such as automotive, where they focus on areas like embedded systems and connected vehicles. Another significant revenue stream comes from the healthcare sector, where they provide solutions for medical devices and healthcare IT. Additionally, Tata Elxsi's media and entertainment services, which include content creation and broadcast solutions, also contribute to its earnings. The company often engages in long-term partnerships and collaborations with global firms, which help to secure steady revenue. The growing demand for digital transformation across industries, coupled with Tata Elxsi's expertise in cutting-edge technologies, further enhances its revenue potential.

Tata Elxsi Limited Financial Statement Overview

Summary

Strong overall fundamentals driven by a solid balance sheet (low leverage, high equity ratio, consistently solid ROE) and healthy, growing operating/free cash flows. The key offset is the recent EBIT downturn/negative EBIT noted in the income statement, which adds execution risk despite otherwise healthy margins.

Income Statement

Tata Elxsi Limited exhibits robust revenue growth with a strong upward trend over the years, despite a recent downturn in EBIT. The company maintained a consistent Gross Profit Margin around 38-39%, although the negative EBIT in the latest year is a concern. Net Profit Margin remains healthy, suggesting operational efficiencies outside of EBIT challenges.

Balance Sheet

The balance sheet is strong with low debt levels and a high equity ratio, indicating financial stability. The Debt-to-Equity ratio is low, reflecting effective management of liabilities. Return on Equity has been consistently solid, showcasing the company's ability to generate returns on shareholders' investments.

Cash Flow

Cash flow analysis reveals a positive trajectory with growing Operating and Free Cash Flows, indicating effective cash management. The Operating Cash Flow to Net Income ratio is stable, while Free Cash Flow growth reflects efficient capital expenditure management. The negative investing cash flow suggests active reinvestment in business operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	36.58B	37.29B	35.52B	31.45B	24.71B	18.26B
Gross Profit	12.64B	14.43B	11.50B	10.58B	10.46B	5.77B
EBITDA	9.56B	11.52B	11.69B	10.36B	8.11B	5.63B
Net Income	6.71B	7.85B	7.92B	7.55B	5.50B	3.68B
Balance Sheet
Total Assets	34.56B	35.86B	31.87B	27.64B	21.69B	17.17B
Cash, Cash Equivalents and Short-Term Investments	12.69B	15.89B	13.80B	11.81B	9.56B	8.53B
Total Debt	1.69B	1.92B	2.24B	1.82B	1.39B	732.10M
Total Liabilities	7.53B	7.26B	6.81B	6.78B	5.68B	3.65B
Stockholders Equity	27.03B	28.61B	25.06B	20.86B	16.01B	13.52B
Cash Flow
Free Cash Flow	0.00	7.96B	6.18B	4.23B	4.12B	3.99B
Operating Cash Flow	0.00	8.12B	7.01B	4.87B	4.83B	4.37B
Investing Cash Flow	0.00	-3.08B	-2.70B	-2.02B	-1.08B	-4.38B
Financing Cash Flow	0.00	-4.99B	-4.28B	-3.03B	-3.26B	-1.26B

Tata Elxsi Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5412.30
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TATAELXSI, the sentiment is Negative. The current price of 5412.3 is below the 20-day moving average (MA) of 5505.66, above the 50-day MA of 5310.80, and below the 200-day MA of 5680.77, indicating a neutral trend. The MACD of 0.78 indicates Positive momentum. The RSI at 45.12 is Neutral, neither overbought nor oversold. The STOCH value of 23.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:TATAELXSI.

Tata Elxsi Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TATAELXSI	74 Outperform	₹331.48B	57.10	―	1.38%	-1.19%	-17.92%
CYIENT	73 Outperform	₹126.38B	23.06	―	2.62%	1.68%	-12.95%
MPHASIS	73 Outperform	₹526.00B	29.18	―	1.94%	8.73%	11.33%
TATATECH	70 Outperform	₹262.08B	49.32	―	1.26%	0.29%	7.17%
KPITTECH	69 Neutral	₹285.79B	39.42	―	0.69%	13.34%	5.98%
LTTS	62 Neutral	₹394.35B	31.33	―	1.19%	14.88%	-2.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%