The 36-year-old midcap technology company of the Tata Group aka Tata Elxsi missed street estimates during its Q1FY26 earnings. Tata Elxsi posted a decline in both top-line and bottom-line figures on July 10. The stock will react to earnings on Friday.
Tata Elxsi Q1 Results:
Tata Elxsi posted a net profit of Rs 144.36 crore in the quarter ending June 2025. The PAT dropped by 21.6% from a net profit of Rs 184.07 crore in the June 2024 period. The latest net profit also plunged by 16.3% from Rs 172.41 crore in the March 2025 quarter.
Meanwhile, consolidated revenue stood at Rs 892.09 crore in Q1FY26, declining from Rs 926.45 crore in Q1FY25 and Rs 908.33 crore in Q4FY25.
During the quarter under review, EBITDA came in at Rs 186.7 crore, while its margin is at 20.9%.
"This quarter was challenging across key markets, with macroeconomic uncertainties, industry and customer-specific issues impacting R&D spend and decision-making cycles across geographies," said Manoj Raghavan, CEO and Managing Director, Tata Elxsi.
Further, commenting on the performance, Raghavan said, the company has demonstrated resiliency in protecting business in our largest vertical, executing on large deal wins across key verticals to create sustained revenue streams, and expanding our relationships with our customers.
Highlighting further, he said, "Our transportation business that represents over 50% of our overall revenues, recovered smartly to report a 3.7% growth QoQ in actual currency, and flat in constant currency terms. We are starting to realise the positive impact of large deals won last quarter including SDV related deals with Mercedes-Benz and a European OEM, and Suzuki a quarter prior. We are executing on our adjacency strategy, with two strategic deal wins in the quarter. We see continued recovery and growth of our transportation business through the rest of the year, backed by the deals we have won, a healthy pipeline of large deals and new customer logos."
Moreover, TATA Elxsi's Media and Communication Business (MCV) reported a decline of 5.5% QoQ in constant currency. While the overall business environment in this industry continues to be subdued, the drop is largely due to transition investments for the large deals we won last quarter, he added.
Tata Elxsi Q2 Outlook:
Tata Elxsi is expecting growth in Q2.
Raghavan added, "We expect to bring back growth in Q2 and beyond, on the back of these large deal ramp-ups and a healthy deal pipeline. In this quarter, we also won a strategic multi-million-dollar design-digital deal with a US tech leader for next generation AI and product-feature development."
In the Healthcare and Lifesciences Segment (HLS), he also said, "our next-gen product development and digital offerings delivered two key wins including a global pharma and biotech leader from Europe, and a Medtech leader from Japan. HLS declined 6.7% QoQ in constant currency, primarily affected by tariff related impact on medical device engineering programs and spend with two key customers in the US. We expect recovery in this region in the second half of FY26."
"Our Design and Systems Integration teams successfully delivered a prestigious experiential project in Japan. We are proud of our association and the part we played in the Bharat Pavilion at the World Expo 2025 in Osaka, which was ranked among the Top 5 pavilions alongside US, Italy, Japan, and France," said the CEO.
Overall, the company is expecting steady improvement in bottom-line and margin through the year even as our two largest businesses, transportation and media & communication, return to growth in Q2 FY26 and beyond, and utilization improves on the back of ready capacity and capability it has invested in over the past few quarters.
"Our re-imagined website launched at the start of this quarter, reflects the AI first and human-centric approach to going beyond technology and product to designing experiences that simplify complexity, enhance human lives, and drive sustainable progress - what we call as designing purpose driven experience," he added.
Tata Elxsi Share Price:
This midcap tech stock will react to its Q1 results on July 11. On Thursday, the stock ended at Rs 6139.65 apiece, down by 0.25 on BSE, with market cap of Rs 38,240.62 crore.
About Tata Elxsi:
Tata Elxsi is amongst the world's leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare and Transportation.
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