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Tata Elxsi Q1 FY26 Financial Results: Comprehensive Analysis

Lesson 152/173 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

Tata Elxsi Q1 FY26 Financial Results: Comprehensive Analysis

Recent Insights and Highlights

Key Management Commentary:

Reported operating revenue: ₹892.1 Crore.
EBITDA Margin: 20.9%; Profit Before Tax (PBT) Margin: 21.1%.
Challenging macroeconomic conditions impacted R&D spend.
Transportation business recovered with 3.7% QoQ growth; significant deal wins with Mercedes-Benz, Suzuki, and a European OEM.
Media & Communications and Healthcare segments faced temporary declines but expect recovery in subsequent quarters.
Executed prestigious projects including Bharat Pavilion at World Expo 2025, ranked among Top 5 globally.

Strategic Developments:

Collaboration with Mercedes-Benz for Vehicle Software Engineering.
Strategic partnerships established with Infineon Technologies (EV solutions) and ECOSEP (AI in sports medicine).
Multi-million-dollar digital deals secured in key technology segments.

Consolidated Financial Analysis

Income Statement Highlights (₹ in Crores)

Metric	Q1 FY26	Q4 FY25	Q1 FY25	QoQ %	YoY %
Revenue	892.1	908.3	926.5	-1.8%	-3.7%
Net Profit (PAT)	144.4	172.4	184.1	-16.3%	-21.6%

Segmental & Regional Revenue (YoY Comparison)

Business Segments:

Software Development & Services: ₹872.45 Cr (-3.1% YoY)
System Integration & Support: ₹19.65 Cr (-25.7% YoY)

Regional Revenue Share & Growth:

Region	Q1 FY26 Share	Q1 FY25 Share	YoY Growth (CC)
Americas	39.5%	42.2%	-7.2%
Europe	30.1%	33.7%	-10.4%
India	19.8%	17.6%	+6.4%
Rest of World	10.5%	6.5%	+8.9%

Profit Margins

Margins	Q1 FY26	Q4 FY25	Q1 FY25
Gross Margin	43.7%	44.3%	46.1%
EBITDA Margin	20.9%	22.9%	27.2%
Net Profit Margin	15.5%	18.1%	19.2%

Profitability, Growth & Valuation Ratios (@CMP ₹6139)

Return on Equity (ROE): 19.4%
Return on Capital Employed (ROCE): 24.6%
Trail Earnings Per Share (T_EPS): ₹119.65
Trail Price-to-Earnings (T_P/E) Ratio: 51.3

Industry-Specific Key Performance Indicators (KPIs)

Constant Currency (CC) Revenue Growth: -3.9% QoQ, -9.0% YoY
Attrition Rate: Increased to 15.0%
Utilization Rate: Expected improvement with upcoming deal ramp-ups

Constant Currency (CC) Growth Analysis

Overall CC Revenue Growth: -3.9% QoQ, -9.0% YoY
Transportation: 0.0% CC QoQ, -5.3% CC YoY
Media & Communications: -5.5% CC QoQ, -13.2% CC YoY
Healthcare & Life Sciences: -6.7% CC QoQ, -13.5% CC YoY

Near-Term and Long-Term Outlook

Near-Term (Q2-Q3 FY26): Management anticipates recovery in Media & Communications and Healthcare segments; sustained growth in Transportation.
Long-Term Prospects: Strong growth pipeline backed by strategic partnerships, new customer acquisitions, and significant large deals enhancing long-term sustainable growth and profitability.

Conclusion for Long-Term Investors

Key Positives:

Strategic partnerships and significant large deals won.
Healthy recovery in the largest segment (Transportation).
Proven resilience in challenging market conditions.

Potential Risks:

Continued macroeconomic uncertainty impacting global R&D spending.
Temporary declines in key segments requiring close monitoring.

Investment Stance:

Cautiously Optimistic: Strong long-term growth potential but investors should remain vigilant of macroeconomic impacts.

Disclosure

"This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions."

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Piyush Patel

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