Shares of Tata Elxsi fell on Thursday after it reported a drop in net profit in its Q1 results. Kotak Institutional Equities maintained a "sell" stance on the stock.

What Happened: The Tata Group company reported a 2.5% decline in its net profit to ₹184.07 crore against ₹188.85 crore in the previous year. Its revenue from operations jumped 8.99% year on year to ₹926.45 crore from ₹850 crore in the corresponding quarter of the previous year.

Brokerage Views: Kotak Institutional Equities maintained its "sell" call and raised the target price to ₹5,500 as it does not see a significant upside from the current level. The brokerage firm believes the tech company would benefit from continued ramp-up in Jaguar Land Rover and strength in the automotive segment due to an increase in large deals over the past few quarters and its low exposure to tier 1 suppliers. 

See Also: TCS Shares Upbeat Ahead Of Earnings: Here’s What To Expect

The performance in the media and communications segment was muted for the company, but the conversion of a couple of large deals in the pipeline might deliver growth in the near term. The company's small presence in healthcare and medical devices impacted its overall performance as one of its large clients delayed contract renewals and recovery is unlikely in the near term, the brokerage said. 

However, the research firm expects the company to deliver marginally better revenue growth in FY2025 contributed by tailwinds in transportation. It expects an 11.3% YoY growth in revenue in FY25. 

Price Action: Shares of Tata Elxsi fell 1.64% to ₹7,003 on Thursday morning. 

Read Next: IREDA Logs Jump In FII Holding In June Quarter