Tata Elxsi share price falls 5% post Q4 results; A 700% dividend announcement fails to lift investor sentiments
- Stock Market Today: Tata Elxsi share price declined more 5% in morning trades on Wednesday post Q4 results where it had reported net profit decline of 4.6% sequentially. A 700% dividend announcement at Rs. 70, per equity share of Rs. 10 each, failed to lift investor sentiments.
Tata Elxsi Limited share price dipped more than 5% in morning trades on Wednesday post Q4 Results. Tata Elxsi had reported 4.6% dip in net profit on sequential basis during the March'2024 quarter. The earnings were announced post market hours on Tuesday.
Board of Directors of Tata Elxsi post the March' 2024 quarter also have recommended a dividend of 700% at Rs. 70 , per equity share of Rs. 10 each, for the financial year 2023-24. The same is to be paid or dispatched on or after the seventh day from the conclusion of the 35th Annual General Meeting, subject to the approval of the shareholders of the Company.
The announcement on dividend nevertheless failed to lift investors sentiments. Tata Elxsi share price that had given multibagger return of more than 50 times from close to ₹200 a share levels at start of 2014 to all time highs of more than ₹10000 in August 2022, however has corrected thereafter. In the near past the Tata Elxsi share price is down more than 20% since its December'2023 highs.
The weak sentiments towards IT companies is led by expectations of no significant earning improvement to be seen in the near term. The growth is likely to be registered during FY25 but at a lesser intensity than anticipated. The discretionary spends remain elusive leaving to tepid revenue growth outlook. There is some compression in margins of some companies though may be temporary.
Tata Elxsi Q4 performance during Q4 also held testimony.
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In Q4FY24, Tata Elxsi net profit dropped by 4.6% to ₹197 crore from ₹206.4 crore in Q3FY24. On year-on-year basis also the net profit declined 2.3%.
Additionally, the company's operational revenue for the quarter decreased by 1%, from ₹914.2 crore in the December quarter to ₹906 crore. On year on year basis the revenue however was up 8.1%.
The company's operational Ebitda for the March quarter at ₹233.7 crore, was down 4.5% from ₹244.7 crore in the December quarter.
Ebitda stands for Earnings Before Interest, Tax depreciation and amortisation.
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