Thread by @ParveenBhansali

#TataElxsi is now on the way to become TCS of ER&D stocks as last 7 quarters Co hv been consistently growing sequentially.

Compared to the last financial yearr, Co is starting with a much healthier order book this financial year.

Last quarter’s attrition no's were better than the overall industry.

Attrition has been a reality
for the last 30 years since Co's have been in existence. It has peaked at certain times, and it has dropped at certain times.

Fixed price project which is 54% of the total delivery is helping Co in terms of the bottom line as they are
able to execute and perfectly deliver those projects on time. It is also helping Co in terms of
realizing better rates.

Co getting onsistency in
revenue coz of the movement from project‐based engagements to annuity and long‐term customer relationships which is a positive trend and will continue ahead.

Not only #TataElxsi business market is expanding but also they are
eating away market share from the competition. So it is a combination of both that is really helping them to grow.

Co saying demand is so much that the challenge for them is to have those trained
engineers available so that they can tap into that demand. So that is where they are putting focus and attention.

Looking at the deal pipeline and demand that is coming in and the deals that they are winning, Co saying they have never been in such a situation of abundance. Demand is
not an issue. Their customers are entrusting more and more work to them.

Onsite‐offshore effort mix is 10:90 for last many quarters.

Pre‐COVID it was 30:70 which is unlikely to come again but could settle somewhere in between.

So very positive trigger for margins to sustain.

Co is mining the accounts well and is getting new logos and getting multi‐
year deals also. When Co win these deals, in that quarter, the revenue may not be significant but over the
next two, three, or four quarters is when they really ramp up teams, they mine those account well

So as long as Co continue to open new logos and get into these
large multi‐year deals and so on, they can keep on growing good ahead.

Co do not do too much onsite in any case. Everything is offshore, or a large part of it is offshore,

So Co do not have to worry about people addition or staffing overseas. And hence attrition is a smaller
problem for them and this is d biggest guidance Co has given.

Forex currency has also supported in terms of setting off some of
cost inflation impacts, whether in terms of the wage hikes or the attrition.

Given Co's strong digital engineering capabilities, they would benefit from the current upcycle in Engineering R&D (ERD) spends. It is expected to deliver industry-leading margin in FY2023, led by a higher offshore mix, and currency tailwinds.

Wage hike has already been partially
offset by other operating levers present in the organization in terms of the utilizations or the pyramid rationalizations in the last qtr itself.

Also, it has been helped by the better realization from their fixed price projects and some of the rate hikes, so net‐net, the impact that we see is
already partially offset during the quarter.

Tata Elxsi’s key verticals have a huge growth opportunity, considering an increase in R&D spends in automotive, consumer electronics, and medical devices.

The Tata group Co is a specialist vendor for top OEMs and tier-I suppliers. This along with recent re-allocation of R&D budgets towards electronics n software, a large addressable market, n differentiated product offerings is expected to drive the Co revenue growth going ahead,

The company’s strong capabilities in digital engineering, domain
expertise and robust platform portfolio have helped it to strengthen its market position and win wallet share from existing customers.

Hope u all liked my analysis on #TataElxsi growth prospects, margin sustainability, attrition n other tailwinds. Do like share and follow. Thank you.