Tata Elxsi (TATAELXSI) Q3 25/26 earnings summary

Executive summary

• Achieved up to 3.9% QoQ revenue growth and 220 bps EBITDA margin improvement, led by transportation and operational excellence.

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

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

• Continued investments in GenAI-powered regulatory workflows and innovation, with new customer additions and large deal wins supporting future growth.

• Audited financials for the quarter and nine months ended December 31, 2025, were approved with an unmodified auditor opinion.

Financial highlights

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

• EBITDA at ₹222.2 Cr (23.3% margin), up 15.0% 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, which resulted in a ₹9,568.88 lakhs expense.

Outlook and guidance

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

• Recovery and growth in Media & Communications and Healthcare expected from Q4, with a positive mid-term outlook.

• 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 rules are notified.

• Double-digit growth aspirations for transportation and healthcare in FY 2027 remain intact.