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Informist, Saturday, Apr. 18, 2026

By Shakshi Jain

NEW DELHI – Design and technology services company Tata Elxsi Ltd. is expected to report a steep sequential decline in its adjusted net profit for the March quarter despite a moderate rise in revenue. This is likely due to hedge losses owing to the sharp depreciation of the rupee against major currencies, according to analysts. The sequential rise in the top line for the quarter is expected to be driven by the media and communications and healthcare and life sciences verticals, brokerages said.

The company's standalone bottom line for the March quarter is expected to fall 9.5% sequentially to INR 1.85 billion, excluding exceptional items. This is according to the average of estimates from eight brokerages. On a year-on-year basis, the company's bottom line is expected to rise over 7%. The highest net profit estimate for the March quarter is INR 1.94 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 1.79 billion from Elara Securities (India) Pvt. Ltd.

The company's top line for the reporting quarter is expected to rise over 4% sequentially and more than 9% on year to INR 9.93 billion, according to the average of estimates. The highest top line estimate is INR 10.01 billion from Kotak Securities Ltd. and the lowest is INR 9.8 billion from Prabhudas Lilladher Pvt. Ltd.

For the December quarter, Tata Elxsi had reported a standalone net profit of INR 1.09 billion on revenue of INR 9.53 billion. Excluding the one-time cost reported for the trailing quarter on account of the new labour codes, Tata Elxsi had said its profit for the December quarter was INR 1.79 billion. For the year-ago March quarter, the company had reported a net profit of INR 1.72 billion on revenue of INR 9.51 billion.

Overall, brokerages expect the company to report growth of anywhere from 1.2% to 2% in its constant currency revenue for the March quarter. This is lower than the 3.2% growth reported for the trailing three months.

"This is on account of stabilisation in healthcare and life sciences and recovery in media and communications vertical supported by anticipated deal closures," Indsec Securities and Finance Ltd. said. 

Kotak Securities Ltd. said sequential revenue contribution from the transportation business, which accounts for more than 50% of the company's overall top line, is likely to be flat for the reporting quarter. 

MARGIN MOMENTUM

Motilal Oswal Financial Services Ltd. expects Tata Elxsi to report INR 2.27 billion in earnings before interest, tax, depreciation, and amortisation for the March quarter. This is mildly higher than the EBITDA of INR 2.22 billion reported for the December quarter.

Most brokerages anticipate improvement of up to 100 basis points in the company's EBIT margin for the March quarter, led by higher utilisation and depreciation of the rupee against the dollar. Only brokerage Motilal Oswal estimated a net contraction in the company's EBIT margin for the reporting quarter due to a partial wage hike impact of 65-70 basis points. 

Annual salary increments for a majority of Tata Elxsi's employees were rolled out in the December quarter, for which the company had reported an EBIT margin of 20.9%.

Tata Elxsi will announce its March quarter earnings on Tuesday. Investors await the management's commentary on demand across verticals, margin improvement, deal pipeline, impact of the conflict in West Asia, engagement with Jaguar Land Rover Automotive PLC, and the overall outlook for FY27. 

Jaguar Land Rover, a long-time client of Tata Elxsi, had suffered a cyberattack last year that forced a production shutdown. This had an impact on Tata Elxsi's quarterly earnings.

On Friday, shares of Tata Elxsi ended flat at INR 4592.50 on the National Stock Exchange. The stock is down nearly 21% since the company reported its December quarter earnings. It is down almost 32% from its 52-week high of INR 6735, recorded on Jun. 10.

Of the seven research reports on the company available with Informist, three have a 'sell' recommendation on the stock while two have 'hold' and 'buy' recommendations each. The average target price of the 'sell' recommendations is INR 4,540. This is around 1% lower than the current market price.

Following are the Jan-Mar earnings estimates, in INR billion, for Tata Elxsi from eight brokerages, in descending order of net profit estimates:

End

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

Edited by Avishek Dutta

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