Tata Elxsi Limited (NSE:TATAELXSI) Just Reported, And Analysts Assigned A ₹5,235 Price Target

It's been a good week for Tata Elxsi Limited (NSE:TATAELXSI) shareholders, because the company has just released its latest yearly results, and the shares gained 3.1% to ₹4,901. Revenues of ₹37b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹126, missing estimates by 3.0%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, Tata Elxsi's 13 analysts are now forecasting revenues of ₹39.7b in 2026. This would be a credible 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.2% to ₹130. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹41.6b and earnings per share (EPS) of ₹142 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Check out our latest analysis for Tata Elxsi

It'll come as no surprise then, to learn that the analysts have cut their price target 8.3% to ₹5,235. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Tata Elxsi analyst has a price target of ₹7,011 per share, while the most pessimistic values it at ₹4,301. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Tata Elxsi's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.6% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tata Elxsi.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tata Elxsi. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tata Elxsi analysts - going out to 2028, and you can see them free on our platform here.

You can also see our analysis of Tata Elxsi's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.