Tata Elxsi Limited (NSE:TATAELXSI): A Fundamentally Attractive Investment

Attractive stocks have exceptional fundamentals. In the case of Tata Elxsi Limited (NSE:TATAELXSI), there’s is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Tata Elxsi here.

Flawless balance sheet with solid track record

TATAELXSI delivered a bottom-line expansion of 48% in the prior year, with its most recent earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 35%, which is what investors like to see! TATAELXSI is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that TATAELXSI has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. TATAELXSI currently has no debt on its balance sheet. 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 November 12th 18
NSEI:TATAELXSI Income Statement Export November 12th 18

Next Steps:

For Tata Elxsi, there are three key aspects you should further examine:

  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!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.