Established in 1989, Tata Elxsi is a design company that blends
technology, creativity and engineering to help customers transform
ideas into world-class products and solutions. It has a global
presence across US, Europe, APAC and Japan.
A part of the $100 billion Tata group and a listed company, Tata Elxsi addresses the communications, consumer products, defence, health care, media and entertainment, semiconductor and transportation sectors. It is supported by a talent pool of over 4,000 employees and a network of design studios, development centres and offices worldwide.
Product Base:-
1. Software development and services (SDS 84% of revenues):-
1.1 Embedded product design (EPD -- 60-65% of revenue):-
1.1.1 Broadcast and consumer electronics
1.1.2 Transportation
1.1.3 Communication
1.2 Industrial design
1.3 Visual Computing Labs
2. System integration (16% of revenues.):- Systems integration division implements and integrates complete systems and solutions for high-performance computing, CAD/CAM/CAE, broadcast, virtual reality, storage and disaster recovery. It addresses the broadcast, manufacturing, government, defence and education sectors, with an expert team of integration specialists and support engineers located across a wide network of offices. This is backed by strategic partnerships with best-in-class software and technology providers. It also offers storage, network and infrastructure management services for the Indian and overseas markets.
3. Professional Services Group :- Tata Elxsi’s Professional Services Group (PSG) partners with leading OEMs across the world, providing cost-effective and timely solutions and services to enterprises.
Service offerings include: on-site maintenance and field support services, IT consultancy services, resident engineer services, cloud computing services and IT infrastructure managed services.
Consumer Base :- It has a vast consumer base across the world in US,UK and APAC mainly it is also expanding to Latin America and Africa zone.
Risk :- A prolonged recovery in the company’s key customers’ nations and volatile currency may remain challenging for Tata Elxsi. Adverse movement on these fronts may impact the company’s performance negatively. However, Tata Elxsi’s sturdy performance in EPD business and healthy deal wins may help it offset these impacts
DCB is very less than Market Cap but the company is entirely Debt Free.
Cash (Rs. Cr.) 49.82
Market Cap (Rs. Cr.) 4065
Equity (Rs. Cr.) 31.14
Debt (Rs Cr) 0
Net Op. Cash Flow (Rs. Cr.) 14.2 71.7 56.2 36.9 126
Avg Operating cash flow 5years = 61.14
Interest coverage = 5
Interest Expense = Avg Operating cash flow 5years/Interest coverage = 12.22
Min. value of business or DCB = Interest Expense / 0.3 (current interest rate on bond) = 40.76
Enterprise Value = Min. value of business - Debt +Cash end of last year + Equity Value = 121.72
so Enterprise Value !> Market Cap
Fair Value at 13% PAT growth rate and 42 [which is current PE]premium is 1448 and the current price is 1307 hence the upside is still 10%. But a concern is that PE is too high compare to it's industry PE of 25. But at the same time F/PE is 37 and more over as of now PEG stands at 0.89 <1 hence we can say PE is sustainable.
PEG Calculation :- EPS on March 2014 is 21 cr and EPS TTM is 31cr [remember we have yet to have 4th quarter result which at least add some more profit to this]. Hence EPS growth rate still now stands at 47% and the PE is 42. So we have our PEG is 42/47 i.e. 0.89 which is less than 1.
A part of the $100 billion Tata group and a listed company, Tata Elxsi addresses the communications, consumer products, defence, health care, media and entertainment, semiconductor and transportation sectors. It is supported by a talent pool of over 4,000 employees and a network of design studios, development centres and offices worldwide.
Product Base:-
1. Software development and services (SDS 84% of revenues):-
1.1 Embedded product design (EPD -- 60-65% of revenue):-
1.1.1 Broadcast and consumer electronics
1.1.2 Transportation
1.1.3 Communication
1.2 Industrial design
1.3 Visual Computing Labs
2. System integration (16% of revenues.):- Systems integration division implements and integrates complete systems and solutions for high-performance computing, CAD/CAM/CAE, broadcast, virtual reality, storage and disaster recovery. It addresses the broadcast, manufacturing, government, defence and education sectors, with an expert team of integration specialists and support engineers located across a wide network of offices. This is backed by strategic partnerships with best-in-class software and technology providers. It also offers storage, network and infrastructure management services for the Indian and overseas markets.
3. Professional Services Group :- Tata Elxsi’s Professional Services Group (PSG) partners with leading OEMs across the world, providing cost-effective and timely solutions and services to enterprises.
Service offerings include: on-site maintenance and field support services, IT consultancy services, resident engineer services, cloud computing services and IT infrastructure managed services.
Consumer Base :- It has a vast consumer base across the world in US,UK and APAC mainly it is also expanding to Latin America and Africa zone.
Risk :- A prolonged recovery in the company’s key customers’ nations and volatile currency may remain challenging for Tata Elxsi. Adverse movement on these fronts may impact the company’s performance negatively. However, Tata Elxsi’s sturdy performance in EPD business and healthy deal wins may help it offset these impacts
DCB is very less than Market Cap but the company is entirely Debt Free.
Cash (Rs. Cr.) 49.82
Market Cap (Rs. Cr.) 4065
Equity (Rs. Cr.) 31.14
Debt (Rs Cr) 0
Net Op. Cash Flow (Rs. Cr.) 14.2 71.7 56.2 36.9 126
Avg Operating cash flow 5years = 61.14
Interest coverage = 5
Interest Expense = Avg Operating cash flow 5years/Interest coverage = 12.22
Min. value of business or DCB = Interest Expense / 0.3 (current interest rate on bond) = 40.76
Enterprise Value = Min. value of business - Debt +Cash end of last year + Equity Value = 121.72
so Enterprise Value !> Market Cap
Fair Value at 13% PAT growth rate and 42 [which is current PE]premium is 1448 and the current price is 1307 hence the upside is still 10%. But a concern is that PE is too high compare to it's industry PE of 25. But at the same time F/PE is 37 and more over as of now PEG stands at 0.89 <1 hence we can say PE is sustainable.
PEG Calculation :- EPS on March 2014 is 21 cr and EPS TTM is 31cr [remember we have yet to have 4th quarter result which at least add some more profit to this]. Hence EPS growth rate still now stands at 47% and the PE is 42. So we have our PEG is 42/47 i.e. 0.89 which is less than 1.
Tata Elxsi, a leading Global Design & Technology Services Company, has joined as a key member of ‘Frog by Wyplay’ community. Wyplay is a creator of software solutions for leading pay TV operators.
ReplyDeleteFrog by Wyplay is the first independent open source software solution for pay-TV operators. The initiative brings together a growing ecosystem of almost 80 companies across the entire digital TV technology value chain including chipset vendors, device manufacturers, independent software vendors, software development and integration services providers and operators. This comprehensive solution includes access to the complete source code and all the components to build TV operator’s products.
Tata Elxsi provides system integration and software development. The company caters to various industries such as aerospace, consumer electronics, entertainment, FMCG, telecom etc.