Tata Group Stock to Sell: Major Cap Says 700% Dividend, Six Analysts Suggest Buying, Four Suggest Selling

big hat The shares of Tata Elxsi, a Tata Group firm that works in the IT software industry, fell precipitously over the previous two weeks—by 8.03% and 4.22%, respectively—after the company’s revenue growth for the quarter that ended in March 2024 fell short of street projections.

The Tata Elxsi share last traded at Rs 7130.00 on the BSE, representing a 0.51% intraday gain. On March 23, 2024, the firm announced the biggest dividend in its history. Life Insurance Corporation of India (LIC), a public sector business, owns 1,226,008 shares of Tata Elxsi, giving it a 1.97% interest. In the last year, Tata Elxsi Ltd.’s share price increased by 13.38%. Further information is provided below:

According to Tata Elxsi’s April 23, 2024 regulatory filing, the company has declared the highest dividend in its history. The board of directors recommended a 700% dividend, subject to tax, per equity share of Rs. 10 for the financial year 2023–24. The dividend is expected to be paid or dispatched on or after the seventh day following the conclusion of the 35th Annual General Meeting, subject to shareholder approval.

Tata Elxsi Quarterly Performance: For the March quarter, the company reported a net profit of Rs 196.93 crore, down 4.6% quarter-over-quarter (QoQ) from Rs 206.4 crore recorded in the Oct-Dec quarter of FY2024. Its earnings per share stayed at 2.32% below the Rs 201.5 crore reported in the previous year.

The IT behemoth’s operating revenue for the fourth quarter of FY2024 decreased by 1% to Rs 905.9 crore from Rs 914.23 crore reported in the previous quarter, however it was still higher than the Rs 837.91 crore reported in the same period last year. Due to operating savings, the EBIT margin increased to 25.8% for the quarter under review from 26.8% for the previous quarter.

Tata Elxsi Share Performance: As of 18/12/2023, the stock’s 52-week high price is Rs 9191.10 per share, and as of 27/04/2023, its 52-week low price is Rs 6,264.20 per share. It is valued at Rs 44,398.74 crore on the market. Tata Elxsi’s EPS (TTM) is 33.15 and its PE is 55.44.

History of Dividends for Tata Elxsi: Since June 21, 2001, the large-cap company has issued 24 dividends. Tata Elxsi announced an equity dividend of Rs 60.60 per share for the last 12 months. Trendlyne reports that the IT company offers a 0.85% dividend yield at the current share price of Rs 7129.30.

Tata Elxsi Bonus Share: Since September 18, 2017, the business has only disclosed a single bonus issuance. It was announced in a 1:1 ratio, with September 18, 2017, designated as the ex-bonus date.

Brokers’ Perspective: With a target price of Rs 6435 per share, HDFC Securities has maintained a sell call on Tata Elxsi shares. Renowned stockbroker Morgan Stanley downgraded its expectations for Tata Elxsi’s Earnings per Share (EPS) for the fiscal years 2025 and 2026 by 3.9% and 5.4%, respectively, and gave the company’s shares an underweight rating. JPMorgan assigned an underweight rating on Tata Elxsi and lowered its target price from Rs 6,000 to Rs 5,800. Six of the ten experts who have been following the company suggested a sell call, while the other two gave Tata Elxsi a buy call recommendation.

About: On May 5, 1989, Tata Elxsi opened for operation in Bangalore, India’s Silicon Valley, with the goal of developing and advancing software, embedded systems, and electronics applications. According to the firm website, the mission was to promote innovation in the rapidly developing IT sector and quicken the uptake of cutting-edge solutions.