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Tata Elxsi's Q3 Shock: Profit Plummets 45% Despite Revenue Growth

Tata Elxsi has reported a significant drop in its quarterly profit. The company's net profit fell by 45% compared to the same period last year. However, its revenue managed to show a slight increase during the quarter. The CEO highlighted new client wins and a strong deal pipeline for future growth.

Key Points: Tata Elxsi Q3 Net Profit Falls 45 Percent to Rs 109 Crore

  • Consolidated net profit fell 45% year-on-year to Rs 108.89 crore in Q3 FY26
  • Revenue from operations rose marginally by 1.5% to Rs 953.47 crore
  • CEO cited growth led by the transportation business and new OEM deals
  • EBITDA for the quarter stood at Rs 222.2 crore with a margin of 23.3%
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Tata Elxsi's Q3 net profit falls 45 pc to Rs 109 crore

Tata Elxsi reports a sharp 45% YoY drop in Q3 net profit to Rs 109 crore, even as revenue sees marginal growth. CEO Manoj Raghavan comments on performance.

"I am especially delighted with the new programme we won with a strategic off-highway OEM from the US... - Manoj Raghavan, CEO & MD, Tata Elxsi"

Mumbai, Jan 13

Tata Elxsi, the design and technology arm of the Tata Group, on Tuesday reported a sharp decline in profits for the third quarter of FY2025–26 (Q3 FY26).

The company's consolidated net profit fell 45 per cent year-on-year (YoY) to Rs 108.89 crore in Q3 FY26, compared with Rs 199 crore in the same quarter last financial year.

On a sequential basis, profit dropped 29.7 per cent from Rs 154.82 crore recorded in the previous quarter.

Despite the fall in profit, Tata Elxsi's revenue from operations rose marginally to Rs 953.47 crore during the quarter, registering a growth of 1.5 per cent from Rs 939.17 crore in Q3 FY25.

Compared with the previous quarter, revenue improved by 3.9 per cent from Rs 918.1 crore.

Commenting on the performance, Manoj Raghavan, Chief Executive Officer and Managing Director of Tata Elxsi, said growth during the quarter was led by the company's transportation business.

He noted that faster ramp-ups in software-defined vehicle-led original equipment manufacturer deals, which were secured earlier in the year, supported performance.

"I am especially delighted with the new programme we won with a strategic off-highway OEM from the US for the development of a complex operator information and control system, that underscores Tata Elxsi's design digital proposition for turnkey system and software development integrated with HMI and human-centric design," he stated.

He also pointed to the normalisation of workstreams with a strategic OEM client that had been impacted in the previous quarter.

Tata Elxsi's earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at Rs 222.2 crore for Q3 FY26.

The company reported an EBITDA margin of 23.3 per cent, according to its stock exchange filing.

"This is backed by the strategic shift of our customer base in each of our verticals, new customer additions, large deal wins, investments in future forward technology areas and Gen AI, and the strong deal pipeline we carry into the coming quarter and next financial year," Raghavan mentioned.

- IANS

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Reader Comments

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Rohit P
The transportation vertical is doing well, which is good for the long term. Winning a complex project from a US OEM is a big deal! 🚗 The profit dip might be a short-term blip due to investments in Gen AI and new tech. Tata companies usually bounce back.
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Aman W
As an investor, I'm looking at the EBITDA margin of 23.3%. That's still healthy! The market is tough right now for IT/design firms. The fact that revenue is inching up is a positive sign. Let's see the next quarter.
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Sarah B
Interesting to see the focus on software-defined vehicles. That's the future. The CEO's comments sound confident about the pipeline. Sometimes you have to spend (lower profits) today to earn more tomorrow. Cautiously optimistic.
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Karthik V
Yaar, profit almost halved? That's not a good look. They talk about "normalisation of workstreams" – sounds like they had some client issues last quarter. Hope they've fixed it for good. Tata name gives trust, but numbers need to improve.
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Nisha Z
The marginal revenue growth with a sharp profit fall indicates pressure on margins. Maybe high costs or one-time expenses? The focus on Gen AI is necessary to stay competitive. Fingers crossed for the coming quarters! 🤞

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