Tata Elxsi (TATAELXSI) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue from operations reached INR 939.2 crores (₹93,917.12 lakhs), up 2.7% YoY but down 1.7% sequentially, with steady top-line performance in a seasonally weak quarter.

• EBITDA margin was 26.3% and PBT margin 26.1%, impacted by full salary increases and adverse currency movements.

• India revenue grew 21.9% YoY, Japan and emerging markets surged 66.8% YoY, offsetting challenges in Europe and the U.S.

• Automotive, media & communication, and healthcare verticals all showed modest quarter-on-quarter growth in constant currency.

• Audited financial results for the quarter and nine months ended December 31, 2024, were approved by the Board with an unmodified audit opinion from the statutory auditors.

Financial highlights

• Revenue from operations: INR 939.2 crores (₹93,917.12 lakhs), up 2.7% YoY, down 1.7% QoQ; EBITDA: INR 246.6 crores (-8.7% YoY, -7.4% QoQ), margin at 26.3%.

• PBT: INR 255.8 crores (-6.6% YoY, -14.3% QoQ); PAT: INR 199.0 crores (-3.6% YoY, -13.3% QoQ); EPS (Basic): INR 31.95.

• EBIT margin dropped from 25% last quarter to 23.5% this quarter.

• Tax rate for the quarter was 22.2%, with YTD at 24.1%; expected to normalize to 24.5%-25% for the full year.

• Q2 FY25 included one-time UK R&D credit, tax refund interest, and tax credit benefits, not repeated in Q3.

Outlook and guidance

• Management expects continued volatility in Europe, steady U.S. performance, and accelerated growth in APAC and India.

• Large deal ramp-ups in automotive, media, and healthcare are expected to drive growth in coming quarters.

• Margins are expected to recover to 25%-26% in the short to medium term as wage hike impacts subside and billability improves.

• FY 2025 is expected to be a soft year, with recovery dependent on market stabilization, especially in Europe.

• The company continues to operate as a going concern, with no indication of liquidity or operational issues.