In this competitive business environment, it becomes essential to maintain healthy numbers when it comes to after-tax profits. The same aids the company’s management in various decision-making activities such as dividend payout, future capex plans, etc.
Listed below is one stock from the Tata Group of companies which portrays a compounded annual growth rate (CAGR) of net profits during a 3-year period of more than 40 percent:
Tata Elxsi Limited
The shares of Tata Elxsi opened their trading session on Friday at Rs 7,450 and currently trade at Rs 7,360 depicting a fall of around 2 percent as compared to the previous closing levels of Rs 7,494.30 apiece. The company has a market capitalization of Rs 45,832 crores.
A few days back, the company announced its financial results for the quarter ended June 2023 (Q1FY23-24) wherein the operating revenues were reported at Rs 850 crores indicating an increase of around 2 percent from Rs 838 crores of revenues in the prior quarter.
On a contrasting note, the net profits marginally went down from Rs 202 crores during the March quarter to Rs 188 crores in the June quarter.
On a standalone basis, the company’s stock has consistently been able to increase its revenues in the last five financial years with the most recent movement being from Rs 2,470 crores during FY21-22 to Rs 3,144 crores in FY22-23.
In addition to the above, the net profits have shown a decent amount of growth shifting from Rs 549 crores to Rs 755 crores keeping the timeframe as mentioned above. The net profit margins, as an effect of the above, have increased from 22.24 percent to 24.01 percent.
Over a period of three years, the net profits rose from Rs 256 crores during FY19-20 to Rs 755 crores in FY22-23 exhibiting a CAGR of around 43.41 percent.
According to the shareholding data available for the June 2023 quarter, the Promoters hold a 43.92 percent stake, and the Foreign Institutional Investors (FIIs) hold a 14.22 percent stake in the company.
Written by Amit Madnani
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