Tata Elxsi Stock Plunges 37% in 2 Years: Is it a Buying Opportunity?

• Tata Elxsi shares have fallen 37% in the last two years and 10% in the last 6-12 months, despite 121% returns over 5 years and 484% over 10 years.
• Brokerage firms like Elara Capital and Motilal Oswal maintain 'Sell' ratings, citing high valuations (45x/38x P/E for FY27E/FY28E) and lack of sustainable growth visibility.
• JPMorgan holds a 'Neutral' rating but increased its target to ₹5,100, acknowledging high valuation.
• The company's Q3 FY26 net profit dropped 45% year-on-year to ₹108.89 crore due to a one-time ₹95.69 crore impact from new labor codes.
• Growth in the December quarter was driven by the transportation vertical, with a positive outlook for the automotive segment, while healthcare remains challenging.

Why It Matters: Despite a significant fall, brokerages advise caution on Tata Elxsi due to high valuations and one-time profit hit.