Tata Elxsi (TATAELXSI) Q4 25/26 earnings summary

Executive summary

• Q4 FY26 revenue reached ₹993.8 crore, up 4.2% QoQ and 9.4% YoY, with EBITDA margin at 24.6% and PBT margin at 25.6%.

• Transportation and Media & Communications segments grew, with strategic wins in APAC, US, and a Tier 1 US Telco; Healthcare declined due to deal delays but saw a new offshore center for Terumo.

• Significant investments in GenAI, including DevStudio.ai, strategic partnerships, and upskilling, are positioning the company as an AI-native engineering organization.

• Audited results for FY 2025-26 were approved, with a recommended dividend of ₹75 per share, and statutory auditors issued an unmodified opinion.

• Recognized for sustainability achievements, including a 72.7% reduction in GHG emission intensity per employee and 66% renewable energy use.

Financial highlights

• FY 2025-26 revenue was ₹3,75,742.37 lakhs, up from ₹3,72,904.83 lakhs YoY; Q4 EBITDA margin was 24.6%, PBT margin 25.6%, and PAT margin 21.1%.

• Net profit for FY 2025-26 was ₹62,843.03 lakhs, with EPS at ₹100.89, both down YoY due to exceptional items.

• Utilization rate for Q4 was 73%; attrition rate increased to 15.8% with headcount at 11,540.

• Margin improvement drivers included 155 bps from currency, 65 bps from operating leverage, and a 90 bps negative impact from salary hikes.

• Cash and cash equivalents at year-end were ₹19,452.12 lakhs.

Outlook and guidance

• Management expects higher single-digit revenue growth for FY 2027, revising down from earlier double-digit aspirations due to macro uncertainties.

• Margin improvement will be gradual, targeting a 27% PBT margin by Q4 FY 2027.

• Recovery in healthcare is anticipated in Q1 FY 2027 as delayed deals are expected to close.

• Board recommended a final dividend of ₹75 per share for FY 2025-26.

• Focus remains on scaling design-led and AI-enabled offerings, strengthening operational leverage, and driving sustainable growth.