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Informist, Tuesday, Jul. 14, 2026

By Shakshi Jain and Arya S. Biju

NEW DELHI/MUMBAI – Tata Elxsi Ltd. Tuesday posted a sharp sequential decline in its net profit for the June quarter as total expenses of the company rose far faster than the revenue for the three months. The company's bottom line fell short of analysts' consensus estimate while the top line surpassed the Street view by a comfortable margin.

Tata Elxsi's bottom line reverted to a sequential decline after more than doubling in the trailing quarter. The top line, on the other hand, grew for the fourth consecutive quarter in Apr-Jun, albeit at a slower pace than in the preceeding three quarters.

The design and technology service provider's standalone net profit for the June quarter fell almost 23% sequentially but rose over 18% on year to INR 1.71 billion. Analysts had pegged the company's bottom line for the quarter at INR 2.01 billion.

The Tata-group company's total income from operations, including other income, rose 1.8% sequentially and over 14% on year to INR 10.63 billion for the reporting quarter. Analysts' consensus revenue estimate for the quarter was INR 10.21 billion. 

In constant currency terms, the company's revenue for the quarter ended June rose 1.3% sequentially and 6.5% on year. Analysts had expected the company to report constant currency revenue growth of 1–2.3% on a sequential basis.

"For the quarter, Tata Elxsi delivered a healthy performance with growth in our two primary verticals, supported by strong deal execution and continued momentum in large strategic engagements," Manoj Raghavan, chief executive officer and managing director of Tata Elxsi said in a post earnings press release. "The performance in the quarter reflects the strength and increasing relevance of our design-led and AI-enabled engineering capabilities in our chosen industries."

Revenue from the company's largest segment, software development and services, grew 1.1% sequentially and nearly 6% on year in constant currency terms. Sales from the segment contributed nearly 97% of the company's total sales for the reporting quarter. Revenue from the company's system integration and support vertical, which contributed just over 3% to its total sales, grew 8% sequentially and 29% in constant currency terms.

Within the software development and services segment, media and communications sales grew nearly 3% sequentially in constant currency terms, supported by continued ramp-up of key deals and expanded strategic long-term deals with global operators, broadcasters and device original equipment manufacturers, Tata Elxsi said in the press release. 

Revenue from its transportation business declined 0.4% sequentially but rose 6.7% on year in constant currency terms. The on-year growth was led by improved engagements with original equipment manufacturers and strategic wins in the off-road and aerospace segments, Tata Elxsi said. Revenue in constant currency terms from the healthcare and life sciences business declined 0.3% sequentially and over 22% on year amid a subdued industry environment. "We are investing in pivoting to an AI-first, design-led, and regulatory-aware engineering approach in this (healthcare) business, partnering with leading AI companies across the world," the company said.  

The company's total expenses rose nearly 7% on quarter to INR 8.30 billion. This was mainly on the back of a near-4% sequential rise in employee benefit expenses to INR 5.88 billion and a 21% jump in other expenses to INR 1.35 billion. 

The company's earnings before interest, tax, depreciation, and amortisation for the June quarter were INR 2.16 billion, down around 12% on quarter. This was also below the EBITDA of INR 2.42 billion and INR 2.46 billion estimated by Kotak Securities Ltd. and Motilal Oswal Financial Services Ltd., respectively. The company's EBITDA margin for the reporting quarter declined by 340 basis points on quarter to 21.2%. The company's EBIT for the quarter was INR 1.94 billion, down 12.5% on quarter. Its EBIT margin was 19% in the June quarter, down 330 bps from the trailing quarter. 

Tata Elxsi lost 204 employees during the June quarter, taking its total employee headcount to 11,336 as of Jun. 30. Its employee attrition rate also inched up to 16% from 15.8% in the March quarter.

"FY27 marks a year of future focus for the company, as we prepare and equip ourselves for a world reshaped by AI. We are making targeted investments in specialised talent, AI powered platforms, tools and infrastructure, to pivot to a Domain + AI future," Raghavan said. "We are firmly focussed on sustainable growth, deepening our engagements with key customers and positioning ourselves to shape and win strategic long-term deals and add marquee customers, even as we protect and improve upon our industry-leading margins," he added. 

Tata Elxsi announced its June quarter earnings post market hours. Ahead of the earnings, shares of the company closed over 3% lower at INR 3,697.30 on the National Stock Exchange. End

Edited by Deepshikha Bhardwaj

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