Tata Elxsi Limited: history, ownership, mission, how it works & makes money

A Brief History of Tata Elxsi Limited

Tata Elxsi Limited, a part of the Tata Group, was established in 1989. The company specializes in design and technology services across various sectors, including automotive, broadcast, communications, and healthcare.

In its early years, Tata Elxsi focused primarily on providing software development services. By the mid-1990s, the company expanded its services to include product design and development, tapping into the growing demand for engineering and design capabilities.

In 1999, Tata Elxsi made a significant milestone by being the first company in the Tata Group to go public, raising approximately INR 750 million through its Initial Public Offering (IPO). This event marked its transformation into a publicly traded entity, enabling further investment in technology and infrastructure.

By the early 2000s, Tata Elxsi began to intensify its focus on emerging technologies, such as embedded systems and product engineering. The company started leveraging the rising trend of digital transformation, which led to increased project opportunities in the automotive domain.

In 2012, Tata Elxsi launched the 'Tata Elxsi Innovation Fund,' aimed at investing in startups and nurturing innovation in new technologies. It underscores the company's commitment to fostering growth and development in the technology sector.

In recent years, Tata Elxsi has consistently reported robust financial performance. For the financial year ended March 2023, the company posted a revenue growth of approximately 16% year-over-year, reaching INR 26 billion. Its net profit for the same period was recorded at INR 4.2 billion, showcasing a profit margin of about 16%.

The company has also made strides in automating and digitizing services across various industries. Through partnerships and collaborations, Tata Elxsi has enhanced its capabilities in areas like AI, machine learning, and the Internet of Things (IoT), providing cutting-edge solutions to its clients.

As of October 2023, Tata Elxsi's stock is traded on the National Stock Exchange of India (NSE) under the ticker symbol 'TATAELXSI.' The company's stock price recently reached approximately INR 6,350, with a market capitalization nearing INR 350 billion.

Tata Elxsi continues to invest in research and development to stay ahead of technology trends, reinforcing its position as a leader in design and engineering services. The company's commitment to innovation has positioned it as a sought-after partner for enterprises seeking digital transformation.

With a workforce of over 9,000 employees across the globe, Tata Elxsi has established a strong presence internationally, catering to clients in over 30 countries. Its diverse portfolio spans automotive, healthcare, and broadcast, allowing for sustainable growth and resilience against market fluctuations.

A Who Owns Tata Elxsi Limited

Tata Elxsi Limited, a prominent Indian design and technology services company, is part of the larger Tata Group. As of the latest financial data, the ownership structure of Tata Elxsi is primarily composed of institutional and retail investors, with a significant portion held by the Tata Trusts.

Below is the detailed ownership structure:

As of the end of September 2023, Tata Elxsi had a total outstanding share count of approximately 24.4 million shares. The company’s market capitalization stood at around ₹34,000 crores (approximately $4.1 billion USD).

The Tata Trusts, which own the majority stake in Tata Elxsi, are a group of charitable organizations that manage a significant portion of the Tata Group's shareholdings across various companies.

In recent performance metrics, Tata Elxsi reported a revenue of ₹1,319 crores (approximately $158 million USD) for the financial year ended March 2023, representing a year-on-year growth of 15%. The net profit for the same period was approximately ₹275 crores (around $33 million USD), marking a growth of 12% compared to the previous year.

Investors are keenly watching Tata Elxsi due to its robust performance in sectors such as automotive, healthcare, and broadcast media. The company has also been investing heavily in research and development, creating a growing interest among institutional investors.

Furthermore, Tata Elxsi's stock performance has been notable, with its shares trading at approximately ₹1,400 as of October 2023, reflecting an increase of nearly 25% over the past year.

Overall, Tata Elxsi's ownership is characterized by a combination of institutional backing and strong retail interest, driven by its consistent financial performance and strategic growth initiatives within the technology and design sectors.

Tata Elxsi Limited Mission Statement

Tata Elxsi Limited is a leading design and technology services company that focuses on various industries, including automotive, broadcast, and healthcare. The mission statement revolves around delivering world-class solutions to enhance customer experience through innovation and technology.

The company aims to leverage its expertise in software development, product design, and advanced technologies. This aligns with Tata Elxsi’s vision to be a significant player in the digital transformation landscape.

• Innovation: Emphasizing creativity and technology integration in solutions.
• Quality: Commitment to delivering high-quality services and products.
• Collaboration: Building strong partnerships to enhance customer success.
• Sustainability: Prioritizing sustainable practices in all operations.

The mission statement reflects Tata Elxsi's commitment to fostering innovation and sustainability while offering robust technology solutions tailored to meet evolving customer needs.

Tata Elxsi has experienced significant growth in revenue and profitability over recent years, signifying the successful execution of its mission. The increase in market capitalization reflects investor confidence and the company’s strategic positioning in various sectors.

The alignment of Tata Elxsi's mission with its operational strategies has enabled the company to maintain strong relationships with customers, driving innovation and efficiency in project delivery.

By focusing on cutting-edge technology and design, Tata Elxsi aims to stay ahead in a competitive landscape. This commitment is evident in their investment in R&D, which accounted for approximately 7.5% of their total revenue in the latest fiscal year.

How Tata Elxsi Limited Works

Tata Elxsi Limited is a leading global design and technology services company. It operates primarily in two segments: Product Engineering Services and Digital Services. As of the second quarter of FY2023, the company reported consolidated revenue of ₹1,163 crore, reflecting a year-on-year growth of 21%.

The Product Engineering Services segment focuses on product design, development, and engineering services. This includes sectors such as automotive, healthcare, and media. In the fiscal year 2022-23, the automotive industry contributed approximately 45% of the segment revenue, spurred by the rising demand for electric and connected vehicles.

The Digital Services segment encompasses software development, IoT, and cloud services. Tata Elxsi's digital transformation offerings gained traction, positioning the company as a key player in the technology consulting space. This segment has seen a growth rate of 25% year-on-year, driven by increasing client investments in digital solutions.

Tata Elxsi's strategy revolves around leveraging its engineering and design capabilities to provide end-to-end solutions. The company employs over 12,000 professionals across various disciplines, enhancing its capacity to deliver innovative solutions. As of Q2 FY2023, Tata Elxsi's operating margin stood at 17%, indicating strong efficiency and cost management.

The company continues to invest in R&D, with a focus on emerging technologies such as AI, machine learning, and 5G. This is crucial as the global demand for digital and technological solutions escalates. Furthermore, Tata Elxsi has established strategic partnerships with several startups, fostering innovation and agility in service delivery.

In terms of market performance, Tata Elxsi's stock has shown robust growth. Over the past year, its share price increased by approximately 75%, driven by positive earnings reports and growing demand for digital services. The current market capitalization stands at around ₹32,000 crore.

Tata Elxsi also has a commitment to sustainability, which plays a significant role in its operations. The company has implemented various green initiatives, aligning with global sustainability goals, and has reported a reduction of 30% in carbon emissions over the past five years.

The global engineering services market is projected to grow at a CAGR of 8.5% from 2022 to 2030, presenting significant opportunities for Tata Elxsi. The company is well-positioned to capitalize on this growth, given its expertise and strategic positioning in various high-demand sectors.

How Tata Elxsi Limited Makes Money

Tata Elxsi Limited, a prominent player in the design and technology services sector, generates revenue primarily through two segments: Embedded Product Design and Industrial Design and Visualization. The company serves multiple industries including automotive, healthcare, and media.

Revenue Breakdown

In the fiscal year 2022-2023, Tata Elxsi reported total revenue of ₹1,421 crore, marking a year-on-year growth of 19% from the previous fiscal year. The revenue is segmented as follows:

The Embedded Product Design segment primarily focuses on automotive, consumer electronics, and telecommunications, leveraging cutting-edge engineering capabilities. Its revenue predominantly stems from software development, testing services, and product lifecycle management.

Major Clientele

Tata Elxsi caters to a diverse portfolio of clients, ranging from startups to Fortune 500 companies. The company derives significant revenue from long-term contracts, particularly in the automotive sector, where clients like BMW, Ford, and Tata Motors form the backbone of their business.

Geographical Revenue Distribution

In the fiscal year 2022-2023, the geographical distribution of Tata Elxsi's revenue highlights its global reach:

Profit Margins

Tata Elxsi has consistently maintained strong profitability metrics. For FY 2022-2023, the company's operating profit margin stood at 20%, with a net profit margin of 15%. This reflects effective cost management and operational efficiency.

Innovation and R&D

Investment in research and development is a key driver for Tata Elxsi's growth. The company allocated approximately ₹112 crore to R&D in FY 2022-2023, enabling the development of new technologies and services, particularly in the domains of artificial intelligence (AI) and Internet of Things (IoT).

Stock Performance

Tata Elxsi's stock has shown robust performance on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). As of October 2023, the stock price was around ₹6,300, reflecting an increase of approximately 37% over the past year. The company’s market capitalization is approximately ₹18,500 crore.

Future Outlook

The company is poised for growth, driven by increasing demand for digital transformation solutions across various sectors. Analysts predict a revenue growth rate of around 20% CAGR over the next five years, primarily fueled by emerging technologies and global expansion strategies.