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HDFC Life Insurance gets CCI nod for acquiring Exide Life Insurance

HDFC Life Insurance gets CCI nod for acquiring Exide Life Insurance
by 5paisa Research Team 03/11/2021

The acquisition is seen as a landmark transaction in the Indian life insurance space.

Competition Commission of India (CCI) approved HDFC Life Insurance's acquisition of Exide Life Insurance on Monday, November 2, 2021. After completion of the share acquisition, Exide Life (which will be a wholly-owned subsidiary of HDFC Life) is proposed to be merged with HDFC Life, the regulator said in the press release.

The approval by CCI comes almost two months after the Board of HDFC Life Insurance approved the acquisition of 100% share capital of Exide Life Insurance Company. The proposed acquisition is for a total consideration of Rs 6687 crore of which Rs 726 crore will be payable in cash and the balance by way of issue of 8,70,22,222 equity shares of the company at Rs 685 per share to Exide Industries Limited (holding company of the Target). The proposed issue will be by way of a preferential allotment basis.

The scheme is expected to accelerate the growth of the Agency business of HDFC Life. Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, thus providing access to a wider market. It is also expected to add 40% to the HDFC Life Agency by adding 36700 plus agents base as of June 30, 2021.

The acquisition will augment the existing embedded value of HDFC Life by approximately 10%. The embedded value of Exide Life, as of June 30, 2021, is Rs 2,711 crore and has been reviewed by Willis Towers Watson Actuarial Advisory LLP, said the acquirer in its exchange filing. The combined embedded value of the Merged Entity will be Rs 30,042 crore (as of June 30, 2021).

HDFC Life is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings, Investment and Health. It commands a private market share of 15.5% for the weighted received premium, while Exide Life Insurance Ltd, an unlisted entity enjoys a market share of 1.3%.

The shares of HDFC Life Insurance is trading at Rs 691.45 with a loss of 0.22% today at 11.53 am.

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Performance of various National Pension Fund Managers as of 29 October 2021!

Performance of various National Pension Fund Managers as of 29 October 2021!
by 5paisa Research Team 03/11/2021

National Pension Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).

The Government of India launched a National Pension Scheme (NPS) in the year 2004 for Government employees. However, it was opened to all sections in the year 2009. This scheme was launched to promote the security of income to Pension Fund subscribers in their old age. Its primary objectives were to help save for life after retirement and provide good returns.

National Pension Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA). NPS can be subscribed by any citizen of India falling between the age bracket of 18 to 60 years. Recently, PFRDA has increased the maximum age of joining under the NPS-private sector. Now, any citizen, resident or non-resident, between the age of 60-65 years can join NPS and continue up to the age of 70 years.

The following table depicts one-year, three-year, five-year returns and returns from inception along with the AUM of various pension fund managers as of 29 October 2021:

SCHEME - E Tier-I 

Pension Fund 

AUM 
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception
 

Aditya Birla Sun Life Pension Management Ltd. 

         208.72  

18.6529 

47.21% 

19.41% 

NA 

14.94% 

HDFC Pension Management Co. Ltd. 

    10,191.13  

35.0508 

53.60% 

21.14% 

16.22% 

16.42% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

      4,051.63  

46.2550 

54.65% 

20.57% 

15.32% 

13.08% 

Kotak Mahindra Pension Fund Ltd. 

         775.94  

42.6731 

52.73% 

21.01% 

15.12% 

12.34% 

LIC Pension Fund Ltd. 

      1,977.96  

29.2667 

55.61% 

18.91% 

13.93% 

13.86% 

SBI Pension Funds Pvt. Ltd 

      7,381.33  

38.3489 

49.45% 

18.85% 

14.51% 

11.39% 

UTI Retirement Solutions Ltd. 

      1,126.27  

45.1950 

52.13% 

19.26% 

14.71% 

12.88% 

SCHEME - C Tier-I 

Pension Fund 

AUM  
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception 

Aditya Birla Sun Life Pension Management Ltd. 

97.61 

    14.5828  

5.84% 

10.74% 

NA 

8.79% 

HDFC Pension Management Co. Ltd. 

4387.87 

    22.4083  

6.40% 

11.39% 

8.81% 

10.28% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

2017.22 

    34.0172  

5.97% 

10.69% 

8.56% 

10.33% 

Kotak Mahindra Pension Fund Ltd. 

367.05 

    32.7505  

5.77% 

9.84% 

7.77% 

9.98% 

LIC Pension Fund Ltd. 

1080.90 

    22.1057  

5.75% 

11.09% 

8.43% 

10.06% 

SBI Pension Funds Pvt. Ltd 

3989.47 

    34.1808  

5.97% 

10.90% 

8.57% 

10.36% 

UTI Retirement Solutions Ltd. 

542.01 

    30.3257  

5.31% 

10.43% 

8.12% 

9.32% 

SCHEME - G Tier-I 

Pension Fund 

AUM  
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception 

Aditya Birla Sun Life Pension Management Ltd. 

137.82 

    14.5336  

3.45% 

11.07% 

NA 

8.71% 

HDFC Pension Management Co. Ltd. 

7182.14 

    21.7883  

3.02% 

11.35% 

8.10% 

9.90% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

3366.84 

    29.1383  

3.28% 

10.89% 

7.89% 

8.96% 

Kotak Mahindra Pension Fund Ltd. 

608.66 

    29.0675  

3.52% 

11.27% 

7.96% 

8.94% 

LIC Pension Fund Ltd. 

1913.50 

    23.4478  

3.30% 

11.89% 

9.07% 

10.85% 

SBI Pension Funds Pvt. Ltd 

8054.27 

    31.4876  

3.18% 

11.07% 

8.03% 

9.64% 

UTI Retirement Solutions Ltd. 

969.77 

    28.0398  

2.74% 

10.64% 

7.53% 

8.63% 

SCHEME -A Tier-I 

Pension Fund 

AUM 
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception
 

Aditya Birla Sun Life Pension Management Ltd. 

1.53 

    13.0556  

6.24% 

5.76% 

NA 

6.16% 

HDFC Pension Management Co. Ltd. 

57.64 

    15.1942  

9.27% 

10.19% 

NA 

8.63% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

13.34 

    14.1597  

8.65% 

8.38% 

NA 

7.29% 

Kotak Mahindra Pension Fund Ltd. 

4.21 

    14.3107  

5.86% 

9.38% 

NA 

7.36% 

LIC Pension Fund Ltd. 

5.64 

    14.7374  

8.72% 

9.16% 

NA 

7.99% 

SBI Pension Funds Pvt. Ltd 

25.58 

    16.0568  

9.65% 

12.45% 

NA 

9.84% 

UTI Retirement Solutions Ltd. 

4.28 

    13.8933  

8.18% 

6.64% 

NA 

6.74% 

SCHEME - E Tier-II 

Pension Fund 

AUM  
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception 

Aditya Birla Sun Life Pension Management Ltd. 

16.23 

    18.5633  

47.19% 

19.36% 

NA 

14.82% 

HDFC Pension Management Co. Ltd. 

520.57 

    30.2516  

53.37% 

21.09% 

16.18% 

14.36% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

212.22 

    36.5949  

54.55% 

20.69% 

15.43% 

11.56% 

Kotak Mahindra Pension Fund Ltd. 

59.29 

    37.5191  

51.93% 

20.64% 

14.98% 

11.77% 

LIC Pension Fund Ltd. 

84.14 

    24.5349  

56.51% 

19.02% 

13.69% 

11.54% 

SBI Pension Funds Pvt. Ltd 

308.84 

    35.4260  

49.74% 

18.92% 

14.55% 

11.23% 

UTI Retirement Solutions Ltd. 

63.37 

    37.1987  

53.90% 

19.67% 

15.34% 

11.69% 

SCHEME - C Tier-II 

Pension Fund 

AUM  
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception
 

Aditya Birla Sun Life Pension Management Ltd. 

8.38 

    14.5828  

5.84% 

10.74% 

NA 

8.79% 

HDFC Pension Management Co. Ltd. 

249.62 

    20.9943  

5.97% 

11.04% 

8.70% 

9.41% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

121.16 

    31.5314  

5.82% 

10.55% 

8.44% 

10.16% 

Kotak Mahindra Pension Fund Ltd. 

27.38 

    28.6455  

5.37% 

10.38% 

8.13% 

9.26% 

LIC Pension Fund Ltd. 

52.78 

    21.0023  

9.36% 

11.71% 

8.63% 

9.45% 

SBI Pension Funds Pvt. Ltd 

173.73 

    30.8574  

5.54% 

10.44% 

8.25% 

9.95% 

UTI Retirement Solutions Ltd. 

28.60 

    29.0088  

5.19% 

10.34% 

8.13% 

9.38% 

SCHEME - G Tier-II 

Pension Fund 

AUM 
(Rs Crs) 

NAV 

Returns 
1 Year 

Returns  
3 Years 

Returns  
5 Years 

Returns  
Inception
 

Aditya Birla Sun Life Pension Management Ltd. 

13.54 

    13.9927  

3.62% 

11.03% 

NA 

7.79% 

HDFC Pension Management Co. Ltd. 

373.32 

    22.0829  

3.09% 

11.08% 

7.91% 

10.08% 

ICICI Pru. Pension Fund Mgmt Co. Ltd. 

176.73 

    27.9012  

3.41% 

10.85% 

7.87% 

9.05% 

Kotak Mahindra Pension Fund Ltd. 

42.09 

    26.8816  

3.45% 

10.66% 

7.70% 

8.68% 

LIC Pension Fund Ltd. 

128.60 

    23.7815  

3.24% 

12.16% 

9.33% 

11.12% 

SBI Pension Funds Pvt. Ltd 

305.28 

    29.8834  

3.11% 

10.82% 

7.86% 

9.65% 

UTI Retirement Solutions Ltd. 

48.26 

    28.7865  

2.83% 

10.71% 

7.61% 

9.31% 

The above-mentioned schemes are referred to as follows:

E- Investments in predominantly equity market instruments.

C- Investments in fixed income instruments other than Government Securities.

G- Investments in Government Securities.

A– Alternate Investments

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Dilipkumar Lakhi: Analysing the stocks and investment strategy of this famed investor

Dilipkumar Lakhi: Analysing the stocks and investment strategy of this famed investor
by 5paisa Research Team 03/11/2021

This investor has a total of 17 stocks in his investment portfolio as of September 2021

Dilip Kumar Lakhi is known to be one of the most famous diamond merchants of India and one of the top investors in Indian stock markets. He has held some great picks in his kitty which made him a renowned name in the industry. His net worth has jumped from Rs 157.54 crore in December 2015 to Rs 434.52 crore in September 2021. 

Today, we will discuss his latest portfolio and the sectors he has invested in, while also looking at some of the unique features of his portfolio which differentiate his investment from others.

Dilipkumar Lakhi has a total of 17 stocks in his investment portfolio as of September 2021. Below is the list of his top 10 holdings as per the information available by the exchanges.

Sr No 

Company Name 

Holding Value (in Rs Crore) 

Quantity Held 

Holding as on September 2021 

Welspun Specialty Solutions Ltd. 

164.9 

  122,132,717  

23.00% 

Welspun Enterprises Ltd. 

101.5 

     10,381,791  

7.00% 

Aro Granite Industries Ltd. 

6.8 

          966,635  

6.30% 

Unitech Ltd. 

23.8 

  128,758,107  

4.90% 

Almondz Global Securities Ltd. 

16.3 

       1,170,117  

4.50% 

Premier Explosives Ltd. 

10.9 

          459,818  

4.30% 

Nxtdigital Ltd. 

36.8 

          919,369  

3.80% 

Hindustan Fluorocarbons Ltd. 

0.56 

          578,216  

3.00% 

Diligent Media Corporation Ltd. 

0.62 

       2,729,322  

2.30% 

10 

Avonmore Capital & Management Services Ltd. 

2.3 

          536,263  

2.20% 

Welspun Speciality Solutions

Welspun Specialty Solutions is a manufacturer of best in class Alloy & Stainless-Steel products. It is the only integrated producer of Quality Stainless Steel Pipes & Tubes right from steelmaking to the finished products.

As per information on the BSE, this stock was purchased by Dilipkumar Lakhi in May 2018 and the ace investor has a 23% holding in the company amounting to Rs 164.9 crore as of September 2021. The stock has given a 1-year return of 49.89% and 16.95% on a YTD basis.

Welspun Enterprises

Welspun Enterprises (WEL), part of the Welspun Group, is an operating company as well as a holding company. Its key activity is in the infrastructure business where it develops and operates PPP projects in various sectors like roads, water, and urban infrastructure.

As per information on the BSE, Dilipkumar Lakhi has a total stake of 7% in this company amounting to Rs 101.50 crore as of September 2021. The stock has given a 1-year return of 31.34% and 13.25% on a YTD basis.

Aro Granite Industries

Aro Granite Industries Ltd. engages in the manufacture and export of granite tiles and slabs. It exports its products to North America, South America, Europe, and Far East markets. It is the largest exporter of processed granite in India, with a production capacity of 1 million Square-meters/year.

As per information on the BSE, Dilipkumar Lakhi has a total holding of 6.30% in this company amounting to Rs 6.8 crore as on September 2021. The stock has given a 1-year return of 130.74% and 44.07% on a YTD basis.

Unitech – 

Unitech Ltd. is engaged in real estate development including related activities of construction, contracts, consultancy and management services, hotels, manufacturing of power transmission and telecom towers and property management.

As per information on the BSE, Dilipkumar Lakhi has a total holding of 4.90% in this company amounting to Rs 23.8 crore as on September 2021. The stock has given a 1-year return of 34.56% and a negative return of 2.66% on a YTD basis.

Almondz Global Securities

Almondz Global Securities Ltd. operates as an investment banking company. Its area of services includes equity capital market, debt capital market, private equity and M&A, infrastructure advisory, equity broking & wealth management, debt portfolio management services and distribution.

As per information on the BSE, Dilipkumar Lakhi has a total holding of 4.50% in this company amounting to Rs 16.3 crore as on September 2021. The stock has given a 1-year return of 929.68% and a return of 539.3% on a YTD basis.

What does the Portfolio tell us about the Investment Strategy?

There are multiple things stock-picking can tell us about the investment style. Based on the stock picks of Dilipkumar Lekhi we can observe that this ace investors investment strategy includes avoiding popular segments like banks, automobiles, and pharma. Instead, he prefers investing in the least competitive segments, and relies on reversals and contra calls.

The portfolio does not show any sort of inclination towards the companies ranging from the Pharma, Private Banks or Automobile sector, unlike the portfolio of many other top investors like Rakesh Jhunjhunwala. However, Dilipkumar Lakhi likes to invest into the less popular sectors like media sector, printing ink and paper sector, while also investing into cyclical sectors such as steel.

There are two real estate companies in his portfolio, including the heavily beaten down Unitech stock. This is an excellent example of Contra call and an investment in a beaten down stock.

 

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SBI Q2 profit jumps 67% as asset quality improves

by 5paisa Research Team 03/11/2021

State Bank of India (SBI) on Wednesday reported improvement in its asset quality and high earnings growth for the second quarter, powered by lower provisioning as expected by analysts.

India’s largest lender also said its net interest income (NII) rose in double digits while advances grew at a modest pace during the quarter through September.

SBI reported a net profit of Rs 7,627 crore, up 67% from Rs 4,574 crore in the second quarter of last year and an increase of 17% sequentially from Rs 6,504 crore in the preceding quarter ended June 30.

This is more or less in line with expectations even though some brokerage houses were estimating the net profit to rise by as much as 100%.

Net interest income grew 10.65% year-on-year and 12.83% compared with the first quarter to Rs 31,184 crore for the July-September period. The growth was over twice what analysts were anticipating.

The state-controlled lender’s share price shot up after it declared its results before moderating a bit and was trading at Rs 528.55 apiece, up 1.3% at 2.50 PM in a weak Mumbai market on Wednesday.

SBI Q2: Other highlights

1) Operating profit increased by 9.84% YoY to Rs 18,079 crore in Q2 from Rs 16,460 crore a year earlier.

2) Net NPA ratio at 1.52% was down 7 basis points YoY; Gross NPA ratio at 4.90% was down 38 bps YoY.

3) Total deposits grew 9.77% YoY; current account deposits grew 19.20% saving bank deposits grew 10.55%.

4) Domestic gross advances were up 6.17% but corporate loans remained weak with advances down 4%.

5) Retail loans grew 15.17% partly thanks to a 10.74% rise in home loans.

6) Credit cost for Q2 declined 51 basis points YoY to 0.43%.

7) Loan loss provision halved to Rs 2,699 crore during the quarter.

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Do you want to get rich? Invest early!

Do you want to get rich? Invest early!
by 5paisa Research Team 03/11/2021

The power of compounding works like magic if you are invested for a longer time. 
At an early stage of life, individuals tend to have a higher risk appetite so even in case they lose their money they can earn it back and won’t affect their lives, as much as a middle-aged individual or retiree may get affected. When individuals embark on their working journey, they tend to splurge more towards fulfilling their desires of buying a new cell phone, car, or bike. During the initial years of their working life, the earning is less, which makes one believe that they have their whole life in front of them to invest and in this process, they often tend to procrastinate investing for later stages of life. However, the real benefit of investing is to start early. Even a small amount can work for you to achieve your required corpus due to the power of compounding. Compounding means interest-on-interest. In this case, interest is reinvested rather than paying it off, which helps your investment to grow at a faster pace. The power of compounding works like magic if you are invested for a longer time.

Benefits of early investing:

Safeguarding the future: Life is all about ups and downs. Every individual faces an emergency at some point in time, which can cause financial as well as mental stress. At such times, individuals can use their investment, which they had invested earlier as this won’t cause any financial tension.

Risk capacity: Young individuals have higher risk capacity as compared to those individuals, who are in mature stages of their life or nearing retirement. Young investors can bear losses as they have more time to recover those losses whereas, investors, who are nearing retirement or at a mature stage cannot bear losses as they don’t have time to recover the same. Investors with higher risk capacity can invest in high-risk instruments to receive optimum returns.

Retirement planning: One of the biggest pitfalls for retirement planning is starting investment late. When people start working, they think that retirement is too far and why should they invest in it now. This mentality makes people commit mistakes; hence, to achieve the expected retirement corpus, one should invest right from the time they start earning as this won’t create a burden in later stages of life.

Let’s look at an example:

Anjali begins her working life journey at the age of 21. She earns Rs 18,000 every month. She is well informed about the fact of early investing; so, she starts investing Rs 3,000 every month at the rate of 10% till her retirement. On the contrary, Rajeshwari, who also started her working career at the age of 21 and earns the same amount as Anjali every month, started investing Rs 3,000 every month from the age of 31 at the rate of 10% as she wasn’t aware of early investing benefits. Then, what will be the retirement corpus of both Anjali and Rajeshwari at the age of 60?

 
 

 

As we can see from the above calculation, 10 years can make a huge difference of Rs 1.11 crore. Anjali was able to make a great corpus because of early investing while Rajeshwari could not meet the same corpus amount as Anjali due to late investing.

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Rs 1 lakh to Rs 9.91 lakh: This multibagger midcap IT stock gave 891% returns in five years

Rs 1 lakh to Rs 9.91 lakh: This multibagger midcap IT stock gave 891% returns in five years
by 5paisa Research Team 03/11/2021

Long-term investors have made a huge profit by investing in Tata Elxsi as it has surged by 891% in the last five years.

The stock of multibagger Tata Elxsi rallied from Rs 621 in November-2016 to Rs 6,160 today, surging 9.91x times in the last five years. An amount of Rs 1 lakh invested in 2016 would have become Rs 9.91 lakh in 2021.

From the beginning of the year 2021, the stock has rallied 229%, from Rs 1,867 to Rs 6,160. Rs 1 lakh invested in Jan-2021 would have become Rs 3.29 lakh today in just 10 months.

Unique Business model

Tata Elxsi is a software and product development IT company, unlike traditional IT businesses like Infosys and TCS where their main business is software support and maintenance. Tata Elxsi revenue drivers are Embedded product and design (88% of total revenue) provides technology consulting, new product design, development and testing services for various sectors like automotive, broadcast, consumer electrics, healthcare, telecom and transportation industries.

It works with leading OEMs and suppliers in the automotive and transportation industries for R&D, design, and product engineering. It also addresses the complete product development lifecycle from R&D, new product development and testing for broadcast, consumer electronics and communications.

Double-digit growth

In the last five years from FY16 to FY21, revenue has grown at a CAGR of 11% and profit has grown at a CAGR of 19% which shows the steep growth of the company. There is a decent increase in operating profit margin from 21% in FY16 to 29% in FY21, due to optimization in employee cost.

Valuation and Outlook

Digital engineering continues to grow as companies across the industries are prioritizing their R&D efforts towards building new-age digital products and services, resulting in a strong growth opportunity for ER&D companies. Geojit has recommended Accumulate rating for Tata Elxsi by valuing the stock at 53x FY24E EPS with a target price of Rs.6,513.

Though the stock had a massive rally in the past with strong performance, do you still think the company can utilize the present situation and gain momentum?

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