Shares of Tata Elxsi were dropping on Wednesday after the firm posted a dip in net profit in the forurth quarter.

What Happened: The Tata Group company reported a net profit of ₹197 crore, a slight decline of 0.19% compared to ₹201 crore in the same quarter of the previous year. Sequentially, the net profit decreased by 4.5% from ₹206.43 crore in the December quarter.

The revenue from operations for the reported quarter was ₹906 crore, marking a growth from ₹838 crore a year ago but a slight decrease from ₹914 crore in the preceding quarter.

Tata Elxsi’s board declared a dividend of ₹70 per equity share for the financial year 2023-24. This dividend will be distributed on or after the seventh day following the conclusion of the firm’s annual general meeting (AGM).

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In terms of segment revenue, the software development & services segment recorded a quarterly revenue of ₹880 crore, compared with ₹815 crore last year. Meanwhile, the system integration & support services segment revenue stood at ₹26 crore for, up from ₹22.74 crore earned a year ago.

Analyst Reaction: Analysts at Kotak Securities said the result. was weak overall but gave some hope of recovery.

The brokerage said Tata Elxsi’s results disappointed on revenues and margins and showed near-term weakness, but gradual improvement likely through FY25.

The brokerage has a “sell” rating on the stock with a target price of ₹5,400, implying a downside of around 27% from current price levels.

Price Action: Tata Elxsi’s share price was down 4.09% at ₹7,092.85 in early trade on Wednesday.

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