Tata Elxsi reports 21.6% drop in Q1 FY26 profit at ₹144.4 cr, revenue at ₹892 cr

Design-led technology services major Tata Elxsi has posted revenues worth ₹892.1 crore in the first quarter of FY26, while recording an EBITDA of ₹186.7 crore, and an EBITDA margin of 20.9%. The company's profit before tax stood at ₹196.3 crore, with a PBT margin of 21.1%, while net profit came in at ₹144.4 crore, with a PAT margin of 15.5%.

On a sequential basis, the profit numbers slipped 16.2% as the company's profit stood at ₹172.4 crore in the previous quarter (Q4 FY25). On a YoY basis, the profit slipped 21.6% from ₹184.1 crore in the corresponding quarter of the previous fiscal year. The company's revenue also dipped 3.7% from ₹926.45 crore in the year-ago period, while on a sequential basis, the revenue slipped 1.78% from ₹908.34 crore in the quarter ending March 2025.

The quarter was challenging across key markets, with macroeconomic uncertainties, industry and customer-specific issues impacting R&D spend and decision-making cycles across geographies, says Manoj Raghavan, CEO and Managing Director, Tata Elxsi. "The company has demonstrated resiliency in protecting business in our largest vertical, executing on large deal wins across key verticals to create sustained revenue streams, and expanding our relationships with our customers."

Tata Elxsi's transportation business, which represents over 50% of its overall revenues, recovered to report a 3.7% growth QoQ in actual currency, and flat in constant currency terms. "We are starting to realise the positive impact of large deals won last quarter, including SDV-related deals with Mercedes-Benz and a European OEM, and Suzuki a quarter prior. We are executing on our adjacency strategy, with two strategic deal wins in the quarter. We see continued recovery and growth of our transportation business through the rest of the year."

Regarding its media and communication business (MCV), Tata Elxi reported a decline of 5.5% QoQ in constant currency, largely due to transition investments for the large deals it won last quarter. "We expect to bring back growth in Q2 and beyond, on the back of these large deal ramp-ups and a healthy deal pipeline." In Q1, the company also won a strategic multi-million-dollar design-digital deal with a US tech leader for next-generation AI and product-feature development.

The healthcare and lifesciences segment (HLS) declined 6.7% QoQ in constant currency, primarily affected by tariff-related impact on medical device engineering programs and spend with two key customers in the US. "We expect recovery in this region in the second half of FY26."

The company says its design and systems integration teams successfully delivered a prestigious experiential project in Japan. "We are proud of our association and the part we played in the Bharat Pavilion at the World Expo 2025 in Osaka, which was ranked among the Top 5 pavilions alongside the US, Italy, Japan, and France," says Raghavan.

Tata Elxsi is amongst the leading providers of design and technology services across industries, including automotive, broadcast, communications, healthcare and transportation. The Tata Elxsi shares closed 0.26% down at ₹6,136 on the NSE today.