Considering the slowing economic activity and travelling restrictions, Tata Elxsi is focussing more on offshore business. It is also benefiting from higher business from broadcast & communication vertical with increasing traction seen in sub-segments of Broadcast & communication vertical like operators (focussing in the US, Europe, SA, & ME), OTT players & devices (like set-top boxes etc). This is also in alignment with company’s objective of de-risking & diversifying away from transportation business (42% in Q1FY21). We see the sustainability of Tata Elxsi compared to its peers, as it has decreased its dependence of automotive vertical and is more focused on expanding the communication and healthcare verticals. We continue to remain positive over the technology adoption trends and believe that Tata Elxsi has the right set of products/services (Electric vehicles, Autonomous cars and OEM, Internet TV, Cloud and SDN Technology) to address the market opportunity through its collaborative approaches. With the rapid development in the healthcare vertical, we see a breather for the company in this vertical . After rallying ~27% from our last update on the stock (at INR 718/share), Tata Elxsi is currently trading at a P/E multiple of 19.8x/18.1x on FY21E/FY22E earnings. Company posted mixed set of numbers in this quarter but showed resilient performance despite lockdown. The increasing share of Broadcast & Healthcare verticals augur well for future growth. Hence, we are applying a higher P/E multiple of 21x (earlier 18x) and rollover target EPS to FY22 (earlier FY21) to arrive at a revised target price of INR 1,064/share (previously INR 831/per share), an upside potential of 16.5% over the CMP. Accordingly, we reiterate “BUY” rating on the shares of Tata Elxsi.