Is Tata Elxsi Limited (NSE:TATAELXSI) Potentially Underrated?

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Attractive stocks have exceptional fundamentals. In the case of Tata Elxsi Limited (NSE:TATAELXSI), there’s is a financially-healthy , dividend-paying company with a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Tata Elxsi here.

Flawless balance sheet with solid track record and pays a dividend

In the previous year, TATAELXSI has ramped up its bottom line by 36%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 36% return to shareholders, which paints a buoyant picture for the company. TATAELXSI’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that TATAELXSI has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Investors should not worry about TATAELXSI’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.

NSEI:TATAELXSI Income Statement Export February 18th 19
NSEI:TATAELXSI Income Statement Export February 18th 19

TATAELXSI is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.

NSEI:TATAELXSI Historical Dividend Yield February 18th 19
NSEI:TATAELXSI Historical Dividend Yield February 18th 19

Next Steps:

For Tata Elxsi, there are three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for TATAELXSI’s future growth? Take a look at our free research report of analyst consensus for TATAELXSI’s outlook.
  2. Valuation: What is TATAELXSI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TATAELXSI is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TATAELXSI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.