Tata Elxsi Shares Drop Over 7% After Q1FY26 Profit Slumps 22% YoY to ₹144 Crore

Tata Elxsi shares came under pressure on Friday, sliding as much as 7.78% to an intraday low of ₹5,660 on the BSE. The decline followed the company’sQ1FY26 earnings, which revealed a sharp 22% year-on-year drop in consolidated net profit to ₹144 crore, down from ₹184 crore in the same quarter of the previous year.

Tata Elxsi’s Q1 FY26 Revenue, Margins Take a Hit

The company also reported a 3.7% decline in revenue from operations, which fell to ₹892 crore from ₹926 crore a year ago. This downturn was attributed to macroeconomic challenges and client-specific issues that impacted project execution and decision-making.

On a quarter-on-quarter (QoQ) basis, net profit fell 16% from ₹172 crore in Q4FY25, while revenue declined nearly 2% from ₹908 crore.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also contracted significantly, falling 26% YoY to ₹187 crore, compared to ₹252 crore in Q1FY25. Profit before tax (PBT) stood at ₹196 crore, also reflecting a 22% YoY decline.

Tata Elxsi’s Key Wins in Q1 FY26

Despite a challenging quarter, Tata Elxsi managed to secure a few strategic deals:

• A multi-million-dollar design and digital contract with a major US-based tech firm, focused on AI and next-gen product features.
• A strategic partnership in the medical devices space for testing, certification, and compliance services for a cardiovascular product line.

These engagements highlight Tata Elxsi’s continued focus on high-value segments and innovation-led services.

Tata Elxsi’s Management Commentary

Manoj Raghavan, Managing Director and CEO, acknowledged the difficult macro environment and customer-specific headwinds, stating:

“Q1 was challenging across key markets. Macroeconomic factors and delays in client decision-making affected R&D spending. However, we’ve shown resilience in our core verticals and executed well on large deals to build long-term growth avenues.”

Raghavan also emphasised the company’s efforts to deepen client relationships and pursue strategic wins in emerging areas.

Stock Performance Overview

On Thursday, Tata Elxsi shares had closed marginally lower at ₹6,139.60, while the benchmark Sensex dropped 0.41%. The stock has seen a 29% gain over the last 3 months, though it remains down 9% year-to-date, and has fallen 23% over the past 3 years. The company’s market capitalisation currently stands at approximately ₹38,240 crore.

Read More: Best Semiconductor Stocks in July 2025: Dixon, Tata Elxsi, Moschip & More Based on 5-Year CAGR.

Conclusion

Tata Elxsi’s weak Q1FY26 performance has dampened investor sentiment, even as the company continues to secure large deals and focus on high-growth sectors. The coming quarters will be crucial in determining whether these new partnerships can offset macro challenges and revive earnings momentum.

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