Tata Elxsi shares fall 3% after Q2 profit falls 32.5% YoY

Shares of Tata Elxsi witnessed selling pressure, falling 3% to their day's low of Rs 5,406 per share on the NSE on Friday after the design and technology services company reported a 32.5% decline in net profit to Rs 154.81 crore for the second quarter of FY26. The sequential performance, however, showed a 7.2% rise from Rs 144.37 crore in Q1FY26, offering a modest silver lining amid broader year-on-year weakness.

Tata Elxsi’s revenue from operations fell to Rs 918.1 crore in Q2FY26, down from Rs 955.09 crore a year ago. Earnings before interest, taxes, depreciation, and amortisation ( EBITDA) came in at Rs 193.3 crore, with margins contracting to 21%. Profit before tax (PBT) declined 28% annually to Rs 214.72 crore but was up 9.4% sequentially.

The company’s Media & Communications and Transportation segments showed relative resilience, while sequential revenue from the U.S. market rose 7.9%, contributing positively to quarterly performance. However, weakness persisted in the healthcare vertical, reflecting the uneven demand environment that has weighed on Tata Elxsi in recent quarters.

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Brokerage outlook Motilal Oswal maintained a “sell” rating on Tata Elxsi, revising its target price slightly lower to Rs 4,400 from Rs 4,450. The brokerage noted, “Revenue in line, but margin miss; growth led by Media & Communications.”

It further highlighted that the company expects 2HFY26 revenue to grow 4%, while EBIT and PAT are projected to decline 9% and 4% year-on-year, respectively. The brokerage added that “muted tech spending in Automotive and Media is impacting near-term momentum” and that “margins, once a key strength for the company, are under pressure.”

Ahead of the results announcement, Tata Elxsi shares closed 2.2% higher at Rs 5,580 on the NSE. Despite the uptick, the stock remains down over 18% so far this year and trades well below its 52-week high of Rs 8,027.

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