KPIT is pure automotive ERD (engineering, research design) play while Tata Elxi is an ERD play across multiple industry verticals (e.g. automotive, healthcare, media, transportation etc).
KPIT has done really well in the last couple of years due to EV tailwind in auto space while Tata Elxi financial performance in the same duration has suffered due to slow demand in some of the segments. So on a stock performance basis one may like KPIT a lot better although the valuations of the latter are now really stretched.
On a long term basis, however, I like Tata Elxi much better for the following reasons:
1- They have a highly capable management team and have come stronger over several cycles. Their transformation from generic IT service provider to specialized ERD player is quite remarkable
2- They are diversified which gives them a natural hedge against some of the verticals underperforming
3- Their operating metrics are much better than KPIT with better operating margins and cash flow generation
4- Valuations have come down from 100 to mid-50s and I believe some of their underperforming verticals may have bottomed out
5- Being a Tata company always helps and is reassuring to the investors from corporate governance and longevity point of view
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