Tata Multibagger Stock: IT company Tata Alexi Limited (TEL) shares have gained over 43 per cent so far this year and have more than doubled investor money in the past one year. Shares of Tata Alexi 3809.60 to Rs.8,445, resulting in a multibagger return of 121.29% in one year. The last traded price of the stock is Rs 8,445, which is higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Its 52-week low is Rs 3,555.05 per share and 52-week high is Rs 9,420 per share.
Expected returns of up to 15%
Tata Alexi Ltd.’s Annual Report for FY2022 highlighted its differentiated offerings in select industries and increasing focus on design-based approach, customer-based platform business, offshore distribution capabilities and favorable sector tailwinds. Sharekhan has given Buy Call Rating to the shares of Tata Alexi with a target price of Rs. 9,750, indicating an up 15.5 percent from the last traded price of the stock.
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Brokerage firm Sharekhan said in a note that “Tata Alexi Limited’s (TEL) annual report for FY 2022 focused on its differentiated offerings across select industries and the design-led approach, customer-led platform business.” , focused on offshore distribution capabilities and adaptive sector tailwinds. TEL focuses on design thinking and application of digital technologies in high growth areas, which is expected to see strong growth driven by increasing ERD spend. According to Zinov, Indian The share of ERD service providers is expected to grow from $16 billion in 2021 to $58 billion in 2031, at a CAGR of over 13 percent. Digital engineering-led services, strong platform portfolio, deep domain expertise and solid offshore delivery capability Given our wide range of ERDs, we are confident that Tata Alexi will be one of the major beneficiaries among global peers from the current volatility in ERD spending.
“Management remains optimistic of maintaining a high offshore mix (90 per cent in Q4FY2022) in FY2023E, given its robust delivery model and cost-savings to customers, although we believe there is a need for voyage The mix will moderate marginally in FY2023E due to the opening up. Growth in startups is expected to slow, given increasing layoffs, hiring freeze, and strong industry-wide fresher hiring (during FY2022). In addition, the company has brought a wage hike (which covers 65-70 per cent of the workforce) in January 2022 from July (implemented 7-8 per cent wage hike in 2021), which will benefit TEL in FY2023E. We believe the company will continue to deliver industry-leading margins in FY 2023E led by pricing, higher offshore mix, pyramid balance and currency tailwinds,” the brokerage said.
As per the Sharekhan report, given its unique capabilities in design-based engineering, Tata Alexi is poised to take advantage of market opportunities in select industries. Its USD revenue and earnings are expected to grow at a CAGR of 23 per cent and 20 per cent respectively in FY 2012-FY24. “Under our coverage, Tata Alexi is the only company whose stock performance (up 22 per cent) has outperformed CNX IT (down 17 per cent) over the past three months despite interest rate hikes by the US Federal Reserve, rising inflation in developed markets. has performed better. Russia-Ukraine conflict and a possible recession in the US,” it said.
Tata Elxsi stock is trading at 78x/67x its FY2023E/FY2024E earnings, which is costlier. However, Sharekhan continues to prefer Tata Alexi given its strong growth potential, market share gains, superior margin profile, differentiated capabilities in digital engineering and strong balance sheet. Rupee appreciation and/or adverse cross-currency movements will adversely affect its earnings. In addition, a reversal of offshore effort mix could impact its margins, the report said.
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