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Informist, Thursday, Apr. 17, 2025

By Narayana Krishna          
 

HYDERABAD - Weakness in the automotive segment and customer-specific issues in its media and entertainment vertical impacted Tata Elxsi Ltd.'s Jan-Mar financial performance, as the company missed analysts' estimates on the bottom line.

Tata group's product designing, engineering and technology services company reported a net profit of INR 1.72 billion for the March quarter, down 13.4% on quarter. Analysts had estimated Tata Elxsi's net profit at INR 1.79 billion. The company's revenue for the quarter declined 2.8% on quarter to INR 9.51 billion, slightly above estimates. On a year-on-year basis, Tata Elxsi's net profit fell 12.5%, while revenue was up 1.3%.

The fall in net profit is similar to Oct-Dec's performance, but much higher than the first two quarters of 2024-25 (Apr-Mar).

For the financial year ended March, Tata Elxsi reported a net profit of INR 7.85 billion, down 1% on year, while revenue was up 6.4% at INR 39.08 billion. On a constant currency basis, the company's revenue for FY25 is up 3.1% on year, Tata Elxsi said in a press release.

While March quarter results were slightly weak, the company reported robust deal wins, giving visibility for the revenue growth in coming quarters. For Jan-Mar, the revenue fell 5.3% on quarter on a constant currency basis, the company said.

Tata Elxsi reported a 340-basis-point sequential fall in its earnings before interest, tax, depreciation and amortisation margins for the quarter at 22.9%. EBITDA for Jan-Mar fell to INR 2.08 billion from INR 2.47 billion a quarter ago mainly on account of a rise in operational expenditure, input costs and muted operational performance.

The company's total expenditure for Jan-Mar was up 1% on quarter at INR 7.3 billion. Input costs rose 32.3% sequentially to INR 741 million.

DEAL WINS

Though the company faced tough weather across verticals during the quarter, it successfully bagged multi-million and multi-year deals across regions, Tata Elxsi said.

The company signed over $100 million of a multi-year deal in its media and communication vertical and 50-million euro deal from an European automobile company, which is expected to see ramp-up in April. The company is also expecting fresh deals in the automotive business, it said. However, Tata Elxsi expressed caution, as some of the automobile segment clients paused their new programs amid geopolitical uncertainty, the company said.

In the media and communications business, the company saw some customer-specific issues in the quarter due to mergers and business restructuring, while the overall industry continued to exercise caution in research and development spend and innovation, the company said.

Tata Elxsi was also optimistic on its healthcare and life sciences business, driven by demand for artificial intelligence powered diagnostics and therapies. The company's sales for the quarter in healthcare and life sciences business improved by 3.5% on quarter on constant currency basis.

On the attrition front, the company reported its Jan-Mar attrition rate at 13.3% against 12.4% a quarter ago. The total headcount as on Mar. 31 was 12,414 against the 12,878 as on Dec. 31.

The company's board also recommended a dividend of INR 75 per share.

On Thursday, shares of Tata Elxsi ended 0.6% lower at INR 4,900.50 on the National Stock Exchange.  End

US$1 = INR 85.37

Edited by Tanima Banerjee

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