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information technology | IST

Tata Elxsi sees sustained demand uptick; expects EV deals to push R&D spends

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Manoj Raghavan, MD & CEO, Tata Elxsi said the company is bullish on the EV side and have made our investments in intellectual properties and platforms. The electric vehicle (EV) segment is definitely pushing the R&D spend in this automotive industry and the company is well-positioned to capture demand from the OEMs and the overall industry.

Tata Elxsi is on the radar. In the last six months, the stock is up nearly 112 percent while in the last one month, the stock is up around 22 percent. Tata Elxsi is currently trading at around Rs 5,785 on the NSE. To understand the demand dynamics, the deal flow picture and the outlook ahead, CNBC-TV18 caught up with Manoj Raghavan, MD & CEO, Tata Elxsi.
Raghavan said, “The demand scenario has never been so positive and it looks like a sustained demand cycle and not a one-off. It could last for two to three years. Automotive specifically has been down in the last 18 months or so, but in the last two quarters, we have seen an uplift in demand. Customers are spending, new R&D programmes are being commissioned. The electric vehicle (EV) segment is definitely pushing the R&D spend in this industry and the company is well positioned to capture demand from the OEMs and the overall industry.”
“We are very bullish on the EV side, we have made our investments in our intellectual properties and platforms and we believe it's a good position that we are in, especially in the automotive industry,” Raghavan mentioned.
On EVs, he said, “When I look at EVs, it's not just what goes inside the cars, so definitely, we do a lot of work with the OEMs in the space, we also do a lot of work with the tier-I suppliers, people who make motors, inverters, battery banks and so on. We also work outside the vehicle, right on the credit side. So for us, EV is the sum total of all the opportunities that exist. It includes the electronic piece, packaging piece, it also includes a lot of AI, data analytics and all of that which make EVs successful on the road. Therefore, it is a large opportunity for us and we are well-positioned to capture this opportunity.”
On the current order book, Raghavan said, “We don't give details on the order book, etc., but let me tell you, if the order book is 100, over the next two to three years, we expect it to at least triple, that is the sort of business visibility that we are looking at.”
The company is looking at about 7 to 8 percent salary hike. It's going to be effective in the second quarter. So, when asked how IT companies are tackling attrition, the wage bill going up and are they looking at a lot more wage inflation even as the year rolls on? Raghavan said: “Our salary hikes have been effective July onwards, before that, we did a salary hike last October and in between, we also gave one month bonus to all our employees. So, I think employees who stood with the company, especially during the tough times, we have rewarded them pretty well. Attrition is at a manageable level at this point, depending on how the figures move, maybe this quarter and the next, we will decide what else we need to do to retain talent,” he added.
For the full interview, watch the accompanying video