Tata Elxsi shares experienced a significant surge of approximately 10% on Wednesday, January 7, 2026, reaching an intraday high of ₹5,879.50. This rally followed an upgrade in rating from "underweight" to "neutral" by global brokerage firm JPMorgan. JPMorgan also increased its price target for Tata Elxsi to ₹4,800 from ₹4,000. The primary driver for this upgrade is the improving demand in the Engineering Research and Development (ER&D) sector, especially in Europe, which is Tata Elxsi's largest market. JPMorgan raised its revenue estimates for fiscal years 2026 to 2028 by 1% to 4% and improved margin forecasts by 10 to 100 basis points, which translated into earnings per share (EPS) upgrades of 1% to 8%. Despite the positive revision, JPMorgan maintained a "neutral" stance, citing that the new target price still implies a potential downside of about 17% from current levels and that the company trades at premium valuations compared to its peers. Tata Elxsi's automotive segment, which accounts for 55% of its revenue, is expected to benefit from a recovery in automotive demand, but its lower exposure compared to peers like Tata Technologies and KPIT Technologies could limit the scale of earnings upgrades. Over the past year, Tata Elxsi has underperformed, declining by 19%, while the Nifty IT index fell by 14%. However, the stock has shown recent strength, gaining 16.8% in the past month. The company is scheduled to report its Q3 FY26 results on January 13, 2026.