Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - JPMorgan has lowered its price target on Tata Elxsi Ltd (NS:TELX) to INR3,800 from INR4,000 while maintaining an Underweight rating following the company’s disappointing first-quarter results.
The company’s 1Q26 performance missed expectations on both revenue and margins for the fourth consecutive quarter. Revenues declined 3.9% quarter-over-quarter in constant currency terms, driven by weakness in the Media & Telecom (BCBA:TECO2m) segment, which fell 5.5%, and Healthcare, which dropped 6.7%.
The Automotive segment showed signs of stabilization with flat performance. JPMorgan notes that the Auto division has a mixed outlook with large deals from Mercedes, Suzuki, and a European OEM ramping up gradually and JLR stabilizing, though tariff-related uncertainty continues to impact demand, particularly in the United States.
Management expects the Telecom segment to return to growth from the second quarter as large deals begin to ramp up. However, the Healthcare segment faces ongoing challenges due to two client-specific issues.
Based on these results, JPMorgan has reduced its earnings estimates for Tata Elxsi by 3-5% for fiscal years 2026 through 2028.
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