Multibagger stock: After tracking the crash in IT stocks after weak Infosys results, Tata Elxsi stock price rebounded strongly ahead of its Q4FY22 results as the market expected strong performance from Tata Elxsi on Wednesday. However, Tata Group’s IT company announced better than expected fourth quarter results, which triggered further purchases of Tata Elxsi shares in early morning trades. After closing at ₹7600 levels per share on NSE on Tuesday, Tata Elxsi share price jumped today to ₹8190 levels each, registering around 7.75% in two consecutive sessions.
According to stock experts, this rise in Tata Elxsi’s share price can be attributed to Tata Elxsi’s strong fourth-quarter results, better than expected by Dalal Street watchers. Experts said after weak Infosys results, IT stocks were under selling fire, including Tata Elxsi shares. So when the Tata Group’s IT company reported better than expected results, the bulls pumped money into the multibagger stock, which is available at a discount due to the recent IT stock sell-off.
Speaking on the reason behind the rally in Tata Elxsi share price; Ravi Singhal, Vice Chairman of GCL Securities, said: “Tata Elxsi announced better than expected fourth quarter results which works as a major trigger for Tata Group IT stock. Tata Elxsi has announced an increase of almost 40% in its annual net profit. It recorded the highest annual growth ever with operating revenue growing over 35% for the full year, with PAT (Profit After Tax) increasing by around 49%. »
Echoing the views of Ravi Singhal; Santosh Meena, Head of Research at Swastika Investmart Ltd, said: “Management feedback has been positive for the future and the company has won multi-million multi-year contracts in areas such as cloud engineering, development of EV systems. Tata Elxsi has been selected by a leading German Tier 1 Supplier to establish an Offshore Development Center for Autonomous Driving and ADAS technologies and selected to establish and set up a Virtual Reality Innovation Center by a major European manufacturer of utility vehicles. .”
Santosh Meena went on to add that Tata Elxsi shares are one of the strongest IT counters as it rebounds from its high demand zone of ₹7500 to ₹7,700 levels each post-Infosys fueled the selloff.
Due to the good results of Tata Elxsi; Rahul Sharma, Head of Research, Equity 99, said: “The company’s numbers were driven by superb growth in integrated product design, which grew 34.7% per cent (year-on-year). ” He added that the company’s board of directors also recommended a dividend of ₹42.50 per share adding, “We believe this counter will continue to rise in the coming days following its fourth quarter numbers.”
Ravi Singhal of GCL Securities said: “Those who have Tata Elxsi shares in their portfolio can hold the meter higher as the stock can go up to ₹9200 levels in 3 months. He faces a minor obstacle to ₹8400 to ₹8500 levels, which the current mood of the market is enough to cross. We can hold the counter by holding the stop loss at ₹7700 levels each.”
Tata Elxsi shares are one of the multibagger stocks in 2021 as it has delivered around 160% to its shareholders over the past year. During this period, the stock jumped about ₹3,000 levels of action for ₹8000 levels each.
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