Tata Elxsi Q1 Results: Decline in both profit and income

News Topical, Digital Desk : Tata Group's tech company Tata Elxsi has released the results for the first quarter (April-June) of the financial year 2025-26. Both the company's revenue and profits have seen a decline. There has been a big decline in profits. Net profit has fallen by 22% to Rs 144 crore, which can be a matter of concern. Expenses have increased, especially employee salaries. The biggest expense of the company is employee salary, which is increasing continuously. The company's stock closed at Rs 6137, down 0.24 percent on July 10, 2025. The 3-month return is 29 percent. It has fallen by -12 percent in one year. FIIs' share has decreased in March 2025 as compared to March 2024. It has fallen from 14.56 percent to 12.73 percent.

A look at the quarterly results of Tata Elxsi

First of all, talking about revenue, the operating revenue of Tata Elxsi stood at ₹ 892.10 crores in this quarter, whereas it was ₹ 926.46 crores in the same quarter last year i.e. Q1FY25. That is, the revenue has declined by about ₹ 34 crores or 3.7%. The total income of the company, which also includes other income, stood at ₹ 930.57 crores, which was ₹ 958.53 crores last year. That is, there has been a decline of more than ₹ 28 crores in this too. On the other hand, the total expenditure of the company increased to ₹ 734.22 crores, which was ₹ 706.14 crores last year. That is, the expenditure has increased by about ₹ 28 crores. The biggest reason for this is the increase in employee salary, which this time was ₹529.15 crores, while last year the same expenditure was ₹498.52 crores. Talking about profits, in this quarter the company has earned a net profit after tax of ₹144.37 crores, while last year the same profit was ₹184.08 crores. That is, there has been a decline of about ₹40 crores or 22% in profits. Profit per share (EPS) also came down to ₹23.18, while last year it was ₹29.56. That is, there has been a decrease of ₹6.38. There was an income of ₹873 crores from Software Development & Services, but there has been a decline in this too. Income of ₹19.65 crores from System Integration & Support, this is also less than last year.

Decline in EBITDA margin- The estimated EBITDA margin has fallen from 21% to around 18-19%, which shows a decline in operational efficiency.

Other income has increased- However, "other income" (such as bank interest etc.) has increased by 20%, which provides partial relief.

Pressure in segment results- The software business segment saw a decline of 22% and a loss in system integration.

Geographical performance- There has been some pressure in revenue from the US and Europe. India's contribution has increased, now India's share in the company's revenue has increased to 22.4%. The company's total headcount stood at 12,127 in Q1 FY26, which decreased slightly from the previous quarter. Attrition rate increased to 15%, which is a matter of concern in terms of talent retention.

New Deals and Positive Signals – Major deals have been struck with Mercedes-Benz, Suzuki, and a European OEM. New projects are in the pipeline with US clients in the healthcare segment. Deals have been struck in AI, tractor, medtech, and off-road vehicle sectors with clients from the US, Japan, and Europe.