Tata Elxsi Ltd reported a 7.2% sequential increase in net profit to ₹154.8 crore for the quarter ended September 2025 (Q2FY26), compared to ₹144.4 crore in the preceding quarter, signalling a gradual recovery after a soft start to the fiscal year.
Revenue and Margin Performance
The company’s revenue from operations grew 2.9% quarter-on-quarter to ₹918.1 crore, while EBIT rose 4.7% to ₹169.9 crore.
Operating margins expanded to 18.5% in Q2FY26 from 18.2% in Q1FY26, indicating early signs of stability across key verticals following recent headwinds.
Market Reaction and Valuation
Ahead of the results, Tata Elxsi shares closed 2.2% higher at ₹5,580 on the NSE. However, the stock remains down over 18% year-to-date and trades well below its 52-week high of ₹8,027. At current levels, the stock is valued at around 42 times its estimated FY27 earnings, reflecting investor caution despite improving operating metrics.
Business Context
In the previous quarter, Tata Elxsi had reported a 3.9% sequential decline in revenue, driven by weakness in its media, communications, and healthcare segments. The latest quarter’s performance suggests a moderate rebound, supported by better cost efficiency and improving demand visibility in core businesses.
Summary:
Tata Elxsi posted a net profit of ₹154.8 crore, up 7.2% QoQ, with revenue rising 2.9% to ₹918.1 crore. Margins improved to 18.5%, indicating stabilisation after earlier weakness. While the stock gained ahead of the results, it remains significantly below its peak, as investors await clearer growth traction across key verticals.
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