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Informist, Tuesday, Apr. 21, 2026

 

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--Tata Elxsi:Exploring aerospace, defence, battery energy storage for growth
--Tata Elxsi: Auto firms still focus on value, support vs AI or GenAI
--Tata Elxsi: Not concentrated in single geography for automotive segment
--Tata Elxsi: AI used in all projects, use to improve productivity
--Tata Elxsi: Not aggressive or going over-board, nor conservative on AI use
--Tata Elxsi: Hopes to exit FY27 Q4 with profit before tax margin of 27%
--Tata Elxsi: Still not out of woods for media, communications deals
--Tata Elxsi: Hope healthcare performance in Jan-Mar has bottomed out
--CONTEXT: Tata Elxsi management comments in post Q4 earnings analyst call
--Tata Elxsi: Non-closure of deals saw healthcare sales falling QoQ Jan-Mar
 

 

By Sunil Raghu and Gopika Balasubramaniam

 

AHMEDABAD/NEW DELHI – Design and technology services company Tata Elxsi Ltd. is hoping to exit 2026-27 (Apr-Mar) with a profit before tax margin of around 27%, the company management said at its post Jan-Mar earnings call with analysts Tuesday.

 

The company is also expanding its focus on exploring more verticals, including aerospace, defence, battery energy storage for its growth going forward. "So all those three areas we continue to build that muscle, build that strength, do those initial projects, build those capabilities and we are hoping that next four to six quarters, at least one or two of these we will start showing results," a senior company official told analysts.

 

For the March quarter, the company ended its five quarter stretch of reporting on-year decline in profit and reported the highest on-year revenue growth in the last nine quarters. Its net profit increased nearly 28% on year and over 102% on quarter to INR 2.20 billion, as its top line grew over 9% on year and over 4% on quarter to INR 9.94 billion. In constant currency terms, Tata Elxsi's March quarter revenue was up only 1% on year and 0.9% on quarter.

 

The company management said that delay in the expected deal awards in the March quarter for which it had prepared restricted a higher growth in revenue. In fact, the company management said that in the March quarter the healthcare business reached the bottom, and was hopeful to see the operations growing from June quarter. "Hopefully it is just shifted by a quarter and we should be able to recover that position in Q1 (Apr-Jun)," the company official told analysts.

 

On media and communications business, which accounted for nearly 32% of the company's revenue in FY26 and 33% in the March quarter, the management said they have been able to show some growth on some deal wins in the last two quarters. The media and communications business registered a strong growth of 5.6% quarter-on-quarter in constant currency terms over the previous quarter, led by continued deal ramp-ups, a strategic deal for AdTech and a Tier 1 US Telco win. The company also won a multi-year large deal from a leading device original equipment manufacturer for its portfolio of video and broadband products. However, the management said that the sector was still not out of the woods and industry consolidation and cost pressures continued to impact client spending.

 

For the automotive segment, which accounted for more than half the company's revenues in FY26, the management said that it earns nearly 77% of this revenue from original equipment makers. "...that pitch is also shift to OEM business is also helping us...I am still pretty optimistic about the overall automotive market," the company official said.

 

As for the mindset of the clients, the official said that their clients continue to prioritise engineering value and execution support over rapid adoption of artificial intelligence or generative AI, given regulatory and safety considerations. Tata Elxsi also highlighted that its automotive business is geographically diversified, with exposure across multiple regions rather than reliance on any single market. He added that the company, which already has clients across the US, Europe, India and Japan, has begun talks with Chinese auto equipment makers to offer them services.

 

Overall, Tata Elxsi indicated that while deal pipelines remain active, their conversion could become more challenging due to ongoing global geopolitical uncertainties. The company management said they would continue to focus on improving margins through operational discipline, AI-led efficiencies, and a calibrated mix of contract structures, while investing in new growth areas to diversify its revenue base.

 

The company disclosed its financials for the March quarter and FY26 after the stock market closed Tuesday. Its shares closed 3% higher on the National Stock Exchange at INR 4,650.70.  End

 

Edited by Akul Nishant Akhoury

 

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