Synopsis:
Tata Elxi shares plunged by over 7.5 percent on Friday after the company announced its results for the first quarter of this financial year. However, investors are concerned as it took a hit on its profitability more than its revenue as it was mostly flat.
The shares of Tata Elxi are in focus as it reported a 22 percent decline in its year-on-year net profit also reported weak segmental performance. In this article, we will dive more into the details.
With a market capitalization of Rs 36,936 crore, the shares of Tata Elxi Ltd are currently trading at Rs 5,930 per share, down by 34.71 percent from its 52-week high of Rs 9,082.90 per share. Over the past five years, the stock has delivered a superior return of 539 percent.
Q1 FY26 Highlights
Tata Elxi reported a revenue of Rs 892.1 crore in Q1 FY26, down by 3.7 percent from its Q1 FY25 revenue of Rs 926.5 crore. On a quarterly basis, it declined by 1.8 percent from Rs 908.3 crore.
Additionally, it suffered a significant decline in profitability, reporting a net profit of Rs 144.4 crore in Q1 FY26, down 22 percent from Rs 184.1 crore in Q1 FY25. On a quarterly basis, it declined by 16.24 percent from Rs 172.4 crore.
It took a massive hit on its EBITDA margins as well, it declined by 630 bps to 20.9 percent in Q1 FY26 from 27.2 percent a year ago and declined by 200 bps from its previous quarter.
In Q1 FY26, Tata Elxsi’s revenue by region was led by Europe, which accounted for 39.5 percent, America followed with 30.1 percent, India at 19.8 percent, and the Rest of the World at 10.5 percent. Revenues from Europe and America dropped more sharply compared to the same quarter last year. This shows pressure in important international markets.
Tata Elxsi derived 97.3 percent of its revenue from the Software Development & Services (SDS) segment, which saw a 2.9 percent decline QoQ and an 8.8 percent decline YoY in constant currency (CC) terms.
The remaining 2.7 percent came from the Systems Integration & Support (SIS) segment, which declined 29.8 percent QoQ and 14.1 percent YoY (CC). CC (Constant Currency) compares a company’s revenue growth from one year to the next while removing the impact of currency exchange rate fluctuations.
Within the SDS verticals, Transportation contributed the largest share at 55.8 percent, followed by Media & Communications at 31 percent, Healthcare & Life Sciences at 12.2 percent, and Others accounting for the remaining 1 percent.
Tata Elxsi Limited provides product design, engineering, and system integration services around the world. It operates in two segments: Software Development & Services (SDS) and Systems Integration & Support (SIS).
The company offers AI, video analytics, OTT platforms, autonomous vehicle technology, and digital health solutions. Key platforms include AIVA, AutonomAI, TEPlay, Neuron, and TEngage. It serves industries such as automotive, media, telecom, healthcare, and consumer electronics.
Written by Satyajeet Mukherjee
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