Tata Elxsi was submerged by selling as a result of a shocking 74% fall in Q4 net profit.
In reaction, the scrip of the IT hardware and software company dropped 4% to Rs 67.25 on BSE in early trades. It had tumbled even lower to Rs 65.35 earlier. Around 21,900 Tata Elxsi shares were traded on BSE in half-an-hour of trading.
The stock saw a slight recovery from the lower levels ahead of the results, though it moved within the Rs 65-75 range. From a low of Rs 68.15 on 24 April 2003, the stock moved up 2.8% to Rs 70.10 on 29 April 2003.
The stock has been depressed for quite some time now. The 52-week low of the scrip is Rs 64.
Tata Elsxi posted a sharp 74.4% fall in Q4 ended 31 March 2003 net profit to Rs 1.88 crore compared to a net profit of Rs 7.35 crore in the corresponding period last year. Total income went down 29% from Rs 46.05 crore in Q4 ended 31 March 2002 to Rs 32.61 crore in Q4 of 2002-03.
For FY 2002-03, net profit declined 30% to Rs 11.68 crore from Rs 16.74 crore. Total income fell 15.6% to Rs 111.28 crore from Rs 131.96 crore. The company's board declared a dividend of 25% for FY 2002-03.
The company's system integration and support services business, which caters to the domestic market, showed a decline in revenue from Rs 67.18 crore in FY 2001-02 to Rs 33.12 crore in FY 2002-03 due to unfavourable market conditions. This had a solid impact on the overall performance of the company.
The company operates in two business segments - system integration & support services and software development & services. Tata Elxsi has alliances with IBM and SGI for its system integration business.
However, the company is now focussing more on the software division.
Additionally, as a part of its foray into newer areas, the company has set up a media services group, which will focus on animation, post-production and creating special effects for the broadcast industry. This division recently secured orders to create animation for a Hollywood movie and three animated content series for American television channels. The company did not give any project details, citing non-disclosure agreements with the customers.More Hot Pursuits