Tata Elxsi's shares fell 8% to trade at Rs 5,935 on January 10. The company had released its third quarter results a day earlier, i.e. on Thursday, after the market closed. After the results, the stock is under pressure today. The company's performance was below market expectations, due to which brokerage firm Morgan Stanley put the stock in the "Underweight" category.

The brokerage firm has also reduced the target price on this stock from ₹ 6,500 to ₹ 6,000 per share. The brokerage firm cited limited growth prospects due to weak performance in the European transportation, media and healthcare services sectors.

Analysts at Morgan Stanley predict that the stock may underperform due to high valuations and limited growth visibility. In the last three months, Tata Elxsi shares have declined more than 15%, while the Nifty 50 index has declined 4%. The shares hit a 52-week low of ₹ 6,285 on November 18, 2024. How were the results in the December quarter? Tata Elxsi's Q3FY25 net profit declined 3.5% year-on-year (YoY), falling from ₹ 206 crore to ₹ 199 crore. Income from core operations grew 3% to Rs 939 crore. However, total expenses rose 7% to Rs 723 crore due to increased employee benefits and other inputs. The development and services segment grew 3.3% over the previous year. In contrast, systems integration and support services saw an 18.2% decline in income during Q3FY25. Despite the challenges, Tata Elxsi's management remains optimistic about dealing with geopolitical uncertainties in the upcoming quarters. Manoj Raghavan, CEO and Managing Director, Tata Elxsi, said, "During the quarter, our revenue from India grew 21.9% year-on-year, while Japan and emerging markets grew 66.8% year-on-year. This strong performance will support us in the coming quarters, even as we deal with geopolitical uncertainty." The company's strong performance in India and emerging markets is expected to provide support amid the current challenges.