Tata Technologies also does ER&D for Aerospace, Defence & Industrial Heavy Engineering. Also, their Automotive ER&D page says that they offer services to anyone.
Tata Technologies is a subsidiary of Tata Motors which holds 74.43% of the company. They seem to have diversified from automotive to aerospace, industrial and education business. They have slightly lower profitability than Tata Elxsi.
NPM = 12%
ROE = 19%
They are selling loss making subsidiaries to improve profitability. The revenue and profits have shown a sharp jump this year.
For reference and research purpose only.
https://trade.altiusinvestech.com/sharesDetail/Tata%20Technologies%20Ltd%20(TTL)
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Tata Elxsi results
YoY Sales growth 27.8%
YoY Profit growth 62.8%
NPM 24.7%
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I think they will go for merger just like FMCG products from multiple tata companies like tata chemicals was merged and made tata consumer… Similar way, I think tata technologies might be merged with tata elxsi
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Why dont they merge all software companies of TATA? TCS + TATA Elxsi+ TATA technologies?
Just the way LTI getting merged with Mindtree
This is possible. Helps draw synergies across the different verticles.
Tata E seems in a different league; consistent growth in last 8 qtr (except covid qtr) from 386 cr to 726 cr. Margin expansion from earlier 22-25% to 32-33%.
I am invested in KPIT and LLTS; seems missed TE. Not following it closely, hence like to know probable reasons for such performance. Is it due to product mix change, any particular segment or overall change in management or any strategies etc.? Thanks
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Ltts Vs Elxsi - from concall
- combination of factors and levers
- maturity of delivery process which is different from others.
- onshore - offshore ratio
- Tax rate 19% vs 27% coz they moved to SEZ
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Can any senior member help me in understanding the customer for Tata Elxsi in Automotive division. JLR I know, which all other manufacturers are working with them.
Disc : Interested, not invested.
I don’t think Tata ELXSI explicitly publicizes their customer base. They have always referred to their customers as “leading / global / (country-name) automotive OEM”. You potentially could infer some of them indirectly though.
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Tata Motor(JLR) was top customer once upon a time
Whatever I know :
Prominent Clients in Automobile vertical :JLR, Toyota, Nissan, Isuzu, Hyundai Mobis, Panasonic, Denso, Magna, Visteon, Delphi, Schaeffler etc …
Prominent Clients in Broadcast & Communication :Comcast, Sky, Liberty, Google etc
Prominent Clients in Medical & Healthcare vertical -Aesculap, Hitachi, Becton Dickinson, Philips etc
Discl: Invested ,already circa 15 X since first buy during covid ,still holding it(though partially sold recently because of high valuation now ) still biased bcos of my holding
8 Likes
If my research is right, JLR is their prominent client.
Do you have any idea, which products from Tata Elxsi are used in a Range Rover.
Disclaimer -Doing initial research.
Tata Elxsi continues with its growth trajectory.
Q2FY23 highlights:
- Revenues from operations at Rs. 763.2 Cr, + 5.1% QoQ, + 28.2% YoY.
- EBITDA Margin at 29.7%
- Profit after tax at Rs. 174.3 Cr, growing 39.1.% YoY
The company’s growth was primarily volume led,
- Transportation grows 3.8% QoQ and 30.4% YoY.
- Healthcare continues to witness strong growth of 8.2% QoQ and 55.9% YoY.
- Media and Communications reports growth at 2.1% QoQ and 22.2% YoY.
We are gaining market share in both Automotive and Media & Communications, especially in Europe. The numbers are muted in the region due to unfavourable currency movement.
With a net add of 1532, added the highest number of Elxsians in our history in a single quarter, while the attrition rate declined for the second consecutive quarter.
Investor Presentation
Financial Results
EBITA margin declined by 3% qoq pertaining to Employee and other expenses.
Though I am surprised by how they continue to increase revenue from USA and Europe on qoq basis even after all things happening there.
6 Likes
QoQ Profit and margins down, as usual Twitter community and Whatsapp/Telegram community will come under mixed reaction, and it is expected Stock will be under negative sentiment. But if we do some analysis on numbers, then things will be much clear.
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Higher management decided to recruit aggressively in this quarter. It happens when they see strong project pipelines. Management also commented “this has been a quarter of investing strongly in growth for the future.”
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Attrition rate declined for the second consecutive quarter. While other IT companies reporting on an average 25%-30% attrition, Tata Elxsi reporting only 18.7%, which is quite extraordinary.
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Employee cost jumped 7% QoQ and Other Expense jumped 25%, Affecting margins and profitability. After post covid Go to office work environment all IT companies are arranging project parties and team outing events, so this is acceptable.
They are making significant investments in growing their leadership pipeline for delivery, technology and sales, also opening new work facilities. So it is clear they are focused on their long journey. Let us wait for management commentary in concall. Things will be more clear there.
Stock is now 21% down from 52Wk high level. 200 day EMA is around 7853 . Personally I wish it will correct under negative sentiment and comes under 7500 level, that would be 30% down from 52WK high level. 7200 to 7500 level may create a demand zone for long term investors.
Disc : Invested from mid 2018 level, continuously averaging up based on certain indicators.
Edit : Above analysis/observation is entirely my own biased view. This is not a Buy or Sell call. Please do your own investigation before taking any decision.
Points from concall –
- Margin impacted mainly due to aggressive hiring,opening of facilities for working from office(includes cafeteria expense,employee drop expense),Travel related expense,External Training expense etc.
- Company facing supply chain related challenges,on which they are working.
- Resource Utilization dropped to 79%,focus to get back above 80%
- Company building up bench strength,at least it will take 2 qtr to get all recently hired resources in billable position.
- In discussion with few domestic customers to utilize the gov PLI scheme.
- Media and communication business only facing slowdown due to macro economic issues in US,because most of the clients from US.Company hopeful it will take pace in next qtr.
- Among fresh recruit,1000-1100 fresh hire and 500-550 lateral entry.
Overall management tone in cancall was very confident and strongly focused on future growth. Little worried tone on their Media and Communication business slowdown. Except that they were confident on their other segment growth prospects.
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Net employee addition in Q1 FY 23 - 771
Net employee addition in Q2 FY 23 - 1532
Says a lot about their growth visibility
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Yes, that addition is roughly 15% of the total headcount! So, definitely shows they are hiring for the future and Manoj has clearly articulated in FY22 about their order visibility for next 2-3 years. Additionally, If you look at other metrics closely, overall it is not a bad quarter as the market would have you believe but just a departure from the always stellar numbers it is used to seeing for the last 10-12 quarters. The LTM attrition rate is now at 18.7% showing signs of peak (19% in Q1FY23) being crossed (closest peer LTTS is still reporting higher LTM in Q2FY23 vs Q1FY23). Onshore/offshore ratio is stable YoY and QoQ (closest peer LTTS is reporting increased onshore % YoY and QoQ) - this cannot be a standalone indicator and needs to be tracked over coming quarters as large deals and increased onshore % would impact this.
5 Likes
PE basis TTMEPS continues to be high (~64) even after further corrections. Do you feel these multiples will hold?
1 Like