India's Tata Elxsi misses Q4 profit estimates as media vertical blips

BENGALURU(Reuters) - Indian engineering and technology services firm Tata Elxsi reported a smaller-than-expected fourth-quarter profit on Tuesday amid lower discretionary spending in the sector and persisting tepid demand in the media and communications vertical.

The company's net profit fell 2.3% to 1.97 billion rupees ($24 million) for the quarter ended March 31, below analysts' estimate of 2.09 billion rupees. Revenue from operations rose 8.1% to 9.06 billion rupees.

Revenue from the media vertical, its second-largest revenue contributor, fell 4.6% year-on-year. The company also flagged a one-off impact of a deal ramp-down in the vertical due to a merger during the quarter.

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India's $254 billion IT sector has been struggling in recent quarters as clients curtail spending on non-essential projects such as the Internet of Things (IoT) and virtual reality, which Tata Elxsi specialises in.

Larger peers Tata Consultancy Services and Infosys reported smaller-than-expected quarterly revenues earlier this month. Infosys also forecast annual revenue below expectations as global macroeconomic uncertainties squeeze client spending on discretionary projects.



Estimates (next 12 Estimates (next 12 Analysts' sentiment

months) months)

RIC PE EV/EBITDA Revenue Profit Mean # of Stock to price Div yield

growth growth rating* analysts target** (%)

Tata Elxsi Ltd 48.45 36.41 14.26 14.72 Sell 9 1.09 0.81

L&T Technology Services 37.09 23.96 13.06 15.58 Sell 23 1.15 0.89


KPIT Technologies Ltd 50.26 30.24 20.37 28.32 Buy 12 0.87 0.34

LTIMindtree Ltd 25.94 17.70 7.50 11.80 Hold 35 0.86 1.42

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

-- All data from LSEG

($1 = 83.3211 Indian rupees)

(Reporting by Aleef Jahan and Sai Ishwarbharath B in Bengaluru; Editing by Sohini Goswami)