Tata Elxsi (TATAELXSI) Q3 25/26 earnings summary

Executive summary

• Achieved up to 3.9% QoQ revenue growth, led by transportation segment and operational excellence, with broad-based expansion in US and Europe.

• Transportation vertical grew 7.7% sequentially, now over 55% of total revenue, driven by SDV-led OEM deals and normalization with a key client.

• Media & Communication and Healthcare saw marginal declines due to seasonal furloughs and deal delays, but maintain strong pipelines and are expected to recover in Q4.

• Continued investments in GenAI-powered regulatory workflows and innovation, resulting in multi-year deal wins and new customer additions.

• Audited financial results for the quarter and nine months ended December 31, 2025, were approved by the Board, with auditors issuing an unmodified opinion.

Financial highlights

• Revenue from operations reached ₹95,347.43 lakhs (₹953.5 Cr), up from ₹91,810.23 lakhs, with total income at ₹999.5 Cr.

• EBITDA at ₹222.2 Cr (23.3% margin), up 220 bps QoQ; PAT at ₹179.1 Cr (17.9% margin), up 15.7% QoQ but down 10.0% YoY.

• Net profit for the quarter was ₹10,889.22 lakhs, down from ₹15,481.91 lakhs, impacted by a one-time exceptional item.

• EPS (basic and diluted) at ₹28.74, up 15.7% QoQ, down 10.0% YoY; basic and diluted EPS for the quarter were ₹17.48.

• Q3 margins exclude a one-time exceptional item due to new Labour Code; gross margin and operating profit affected by a ₹9,568.88 lakhs expense.

Outlook and guidance

• Confident of sustained and accelerated growth in transportation for the next financial year.

• Anticipates recovery and growth in Media & Communications and Healthcare verticals starting Q4 FY26, with large deals in pipeline.

• Double-digit growth aspirations for transportation and healthcare verticals in FY27 remain intact.

• Utilization targeted to improve from current 75% to 80-85% before significant hiring resumes.

• The impact of the New Labour Codes will continue to be evaluated as related rules are notified by the government.