Tata Elxsi Q3 FY26 Results: PAT at Rs 109 crore, misses Street estimates; margin expands by 250 bps

Tata Elxsi Q3 FY26 Earnings: Tata Elxsi on Tuesday registered a net profit of Rs 109 crore for the quarter ended December 31, missing Street expectations. That marked a quarter-on-quarter (sequential) fall of 29.7 per cent.

The Tata group design and technology services firm reported fiscal third-quarter revenue of Rs 953 crore, translating to 3.8 per cent sequential growth.

The company said that an exceptional amount owing to the new labour laws impacted its performance.

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Tata Elxsi Q3 FY26 Results | Net profit falls short of expectations, revenue in line

According to Zee Business research, Tata Elxsi was estimated to register a net profit of Rs 160 crore with Rs 949 crore in revenue for the December quarter.

Tata Elxsi operating performance

Tata Elxsi's December-quarter earnings before interest and taxes (EBIT) improved to Rs 199 crore from Rs 170 crore in the September quarter.

The Tata group firm's margin improved to 21 per cent from 18.5 per cent -- a sequential improvement of 250 basis points (bps) or 2.5 percentage points.

Zee Business analysts had expected Tata Elxsi's quarterly margin to improve by 47 basis points to 18.97 per cent.

Margin is a key measure of a company's profitability.

Its earnings before interest, taxes, depreciation and amortisation (EBITDA) expanded 2.2 sequentially to Rs 222.2 crore.​

The company said that while growth was led by its transportation unit, seasonal furloughs and delay in some key deal awards at the end of the quarter impacted its media and communications, and healthcare and life services businesses.

Region-wise, growth was driven by Europe and the US, with broad-based growth across key accounts and verticals, noted Tata Elxsi.

Tata Elxsi Q3 management commentary

Tata Elxsi CEO and MD Manoj Raghavan said: "I am pleased with the operational excellence we demonstrated in improving margins, with . This was led by operational and delivery excellence, and improved utilisation."

"We are continuing to invest ahead in applying Gen AI and AI thoughtfully to the innovation and product engineering context, specific to workflows in our chosen verticals and domains, and scaling adoption across the company. This is now strongly ingrained and reflected in the deal wins and value proposition we offer to customers across verticals," he said.

Pleased with the company's overall performance and resilience in revenues, margins and customer additions through the quarter, he said Tata Elxsi is "entering the last quarter of the financial year with a commitment for growth, and the confidence in our design-led and AI-enabled engineering capabilities".

Tata Elxsi share price

On Tuesday, Tata Elxsi (TATAELXSI) shares ended 1.8 per cent higher at Rs 5,796.2 apiece on BSE.

At this level, the Tata Elxsi stock has declined 2.5 per cent in a year, underperforming an 11.5 per cent rise in the Nifty50.

Tata Elxsi has made a strong start to the New Year, up 10.8 per cent as of January 13. The headline index has declined 1.7 per cent during this period.