Tata Elxsi, a design and technology arm of the Tata Group based in Bengaluru, Karnataka, saw its share price drop by 8% on July 11, 2025, reaching a 9-week low after Q1 FY26 results missed analyst expectations. Despite the setback, the company expects growth to resume in key segments by the next quarter.
Tata Elxsi, a Bengaluru, Karnataka-based design and digital technology firm under the Tata Group, saw its stock tumble 8% in early trade on July 11, 2025, reaching a nine-week low of ₹5,660. This sharp decline followed disappointing Q1 FY26 results, which were announced after market hours on July 10. Despite partial recovery later in the day, the stock was still down 3% as of 10:45 a.m.
The company, which provides solutions in transportation, media, healthcare, and communications, posted revenue of ₹892.1 crore for the quarter, down 1.8% quarter-on-quarter and 3.7% year-on-year. The performance was weighed down by global macroeconomic uncertainty and slower decision-making cycles in key verticals.
EBITDA came in at ₹186.7 crore, with a margin of 20.9%—a 10.1% drop from the previous quarter. This was attributed to soft revenues, currency volatility, and increased onsite salary costs.
Net profit declined 16.3% sequentially and 22% year-on-year to ₹144.4 crore, affected by elevated operating expenses and transition costs related to new deals signed in the previous quarter. The company’s EPS fell to ₹23.18.
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Despite the weak results, Tata Elxsi management remains optimistic. They project a recovery in transportation and media & communication segments beginning Q2 FY26, supported by major deals signed recently with Mercedes-Benz, a European original equipment manufacturer (OEM), and Suzuki.
“We see continued recovery and growth in our transportation business through the rest of the year, backed by the deals we have won and a healthy pipeline of large deals,” the company noted in its earnings release.
Brokerages React with Caution
Following the earnings miss, global brokerages maintained a cautious stance:
- Morgan Stanley reaffirmed its ‘Underweight’ rating with a target price of ₹4,660.
- JPMorgan also stuck with an ‘Underweight’ view, lowering its target to ₹3,800, citing a fourth straight quarter of disappointing revenues and margins.
- Bernstein maintained an ‘Underperform’ rating with a target of ₹4,130, citing low growth visibility in the automotive sector and ongoing tariff-related issues.
The firm is facing sustained pressure in its healthcare segment, due to client-specific challenges that continue to impact revenue generation.