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Informist, Monday, Jan. 12, 2026

 

By Shakshi Jain

 

NEW DELHI – Design and technology services company Tata Elxsi Ltd. is expected to report a marginal sequential rise in its bottom line for the December quarter on a slightly higher increase in its top line. While the Tata-group company's revenue is likely to rise on the ramp-up of large deals and resumption of operations of a top automotive client, its net profit growth for the reporting quarter is expected to be limited by wage hikes and deal ramp-up costs, brokerages said.

 

The company's standalone bottom line for the December quarter is expected to rise 1.7% sequentially to INR 1.57 billion, according to the average of estimates from nine brokerages. However, this would mean a fall of nearly 21% on year from INR 1.99 billion in the year-ago December quarter. In the September quarter, Tata Elxsi's net profit had risen to INR 1.55 billion after three consecutive quarters of decline.

 

The company's revenue for the reporting quarter is expected to rise 3.4% sequentially and over 1% on year to INR 9.49 billion, as per the average of estimates. Tata Elxsi had registered revenue of INR 9.18 billion in the trailing quarter and INR 9.39 billion in the year-ago December quarter.

 

Estimates for the company's December quarter net profit range from a high of INR 1.8 billion by Prabhudas Lilladher Pvt. Ltd. to a low of INR 650 million by DRChoksey FinServ Pvt. Ltd. In contrast, the revenue estimates are in a tight range - the highest is INR 9.61 billion by HDFC Securities Ltd. and the lowest is INR 9.39 billion by DRChoksey FinServ.

 

Analysts anticipate a sharp sequential revenue growth in the company's transportation business, which accounts for more than 53% of its overall top line. This is likely to be led by "large deal ramp-ups and stability in JLR engagement," Kotak Securities Ltd. said. 

 

Jaguar Land Rover Automotive PLC, a long-time client of Tata Elxsi, suffered a cyberattack last year that forced a production shutdown. This had an impact on Tata Elxsi's September quarter earnings. "Some of the projects that we were supposed to start in September, that had to be pushed out," the management had said in the post-earnings conference call with analysts.

 

Brokerages anticipate 1.8-2.8% sequential improvement in the company's constant currency revenue for the December quarter.

 

Tata Elxsi's earnings before interest, tax, depreciation, and amortisation for the December quarter are expected to range between INR 1.99 billion and INR 2.10 billion, according to estimates from three brokerages. Kotak Securities has the highest EBITDA estimate while DRChoksey FinServ has the lowest. Brokerage Motilal Oswal has pegged the company's December-quarter EBITDA at INR 2.04 billion.

 

"We expect EBIT margin to improve by 100 bps after absorbing wage hike of ~140 bps aided by business performance, operational efficiency, and rupee depreciation," brokerage Prabhudas Lilladher said. In the September quarter, the company's EBIT margin had expanded by 30 basis points sequentially to 18.5%.

 

Tata Elxsi will announce its December quarter earnings Tuesday. Investors will watch out for the management's commentary on research and development budgets of major automotive clients in calendar year 2026, the outlook for demand in the media and communications vertical, and the pace of ramp-up of existing large deals wins.

 

"We will look for updates on the defence and aerospace vertical where the company has been investing in order to diversify the business. Apart from this, we will watch out for comments on the order book or deal signings as the company does not provide TCV (total contract value) numbers," Nirmal Bang Equities Pvt. Ltd. said.

 

At 1103 IST, shares of Tata Elxsi traded at INR 5,674 on the National Stock Exchange, down 0.3%. The stock is up 1.8% since the company reported its September quarter results. The stock is down 15.8% from its 52-week high of INR 6,735, recorded on Jun. 10.

 

Of the 10 research recommendations on Tata Elxsi available with Informist, eight have a "sell" recommendation on the stock while one each has a "buy" and "hold" recommendation. The average target price of the "sell" recommendations is INR 5,082. This is 11.6% lower than the current market price.

 

Following are the Oct-Dec earnings estimates for Tata Elxsi from nine brokerages in descending order of the estimate of net profit in INR million:

 

Broking firm	Net sales	Net profit	EBITDA
Indsec Securities and Finance Ltd	9,400	1,800
Prabhudas Lilladher Pvt Ltd	9,600	1,800
Nirmal Bang Equities Pvt Ltd	9,411	1,732
Elara Securities (India) Pvt Ltd	9,505	1,704
Motilal Oswal Financial Services Ltd	9,500	1,700	2,038
HDFC Securities Ltd	9,610	1,690
Kotak Securities Ltd	9,482	1,618	2,095
ICICI Securities Ltd	9,512	1,478
DRChoksey FinServ Pvt Ltd	9,391	650	1,987
Average	9,490.11	1,574.67	2,040

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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