Tata Elxsi (TATAELXSI) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 operating revenue reached ₹918.1 crore, up 2.9% sequentially, with EBITDA at ₹193.3 crore (21.1% margin) and PBT at ₹214.7 crore (22.2% margin); profit before tax rose 9.4% QoQ amid challenging market and geopolitical conditions.

• Strong growth in overseas markets, especially the US, which grew 7.9% QoQ; Media & Communication grew 6.8% sequentially, and Transportation grew 0.7% QoQ.

• Transportation, over 50% of revenues, grew 0.7% with a strong deal pipeline and new engineering center opened with Suzuki.

• Healthcare and life sciences declined 2.3% due to project completions, but new deals and a major Bayer partnership provide optimism.

• Audited financial results for the quarter and half-year ended September 30, 2025, were approved by the Board with an unmodified audit opinion from the statutory auditors.

Financial highlights

• Revenue from operations for Q2 FY26 was ₹918.1 crore, up 2.9% QoQ but down 3.9% YoY; total income at ₹967.0 crore, up 3.9% QoQ, down 5.1% YoY.

• EBITDA margin at 21.1%, PBT margin at 22.2%, PAT margin at 16.0% for Q2 FY26; PAT stood at ₹154.8 crore, up 7.2% QoQ but down 32.5% YoY.

• Utilization improved from 66% to over 70% in the last quarter, with a target of 75% by year-end.

• Other income increased 27% QoQ to ₹48.9 crore, aided by hedging gains and UK R&D credits.

• Basic and diluted EPS for Q2 FY26 were ₹24.86, up from Q1 FY26, but down from Q2 FY25.

Outlook and guidance

• H2 expected to outperform H1 in both growth and margins, with double-digit growth targeted in automotive and healthcare for FY27.

• Margin recovery anticipated as utilization rises and revenue grows, despite wage hikes and FX headwinds.

• Foundation set for sustainable growth in H2 FY26, with continued focus on AI-driven services and operational excellence.

• Financial statements prepared on a going concern basis, with no material uncertainties disclosed.