Shares of Tata Elxsi fell by 3 percent on Friday following a significant 32.5 percent drop in net profit, which totaled ₹154.81 crore for the September quarter of FY26. This figure represents a decline from ₹229.4 crore recorded in the same quarter of the previous year.
The company’s revenue from operations also saw a nearly 4 percent decrease, dropping to ₹918 crore from ₹955 crore in Q2FY25. Despite these declines, Tata Elxsi CEO and Managing Director Manoj Raghavan noted that the company achieved robust quarter-on-quarter growth in overseas markets, especially in the United States, which experienced a 7.9 percent increase.
The transportation segment, which contributes over 53 percent of the company’s revenue, reported a slight q-o-q growth of 0.7 percent in the second quarter. This performance builds on previous momentum stemming from large deal signings and global original equipment manufacturer (OEM) software-defined vehicle programs, according to Raghavan. The firm’s workforce numbered 11,951 at the conclusion of the second quarter of FY26.
Amidst these developments, brokerage firms have adopted a cautious stance on Tata Elxsi’s stock. Motilal Oswal has raised concerns regarding execution delays, weakened technology spending in the automotive sector, and persistent challenges in the media segment, leading them to maintain a sell rating with a target price of ₹4,400. They indicated that a revival in growth will depend on improved OEM expenditure and an escalation in large deal acquisitions over the next six to eight quarters, anticipating a gradual normalization of margins during this period.
Choice Institutional Equities has also reiterated a sell rating, setting a target price of ₹4,120. They noted potential for re-rating should there be sustained growth in the transportation and healthcare lifecycle service (HLS) segments, along with margin expansion and enhanced deal activity in media and communications.
Conversely, PL Capital has upgraded its recommendation from sell to reduce, establishing a target price of ₹5,010. HDFC Securities has taken a more optimistic view, asserting that Tata Elxsi is well-positioned for growth acceleration alongside margin improvement, maintaining an add rating with a target price of ₹5,765.
The stock closed at ₹5,406.80 on the Bombay Stock Exchange (BSE), reflecting a decline of 2.98 percent after reaching a low of ₹5,395.
Published on October 10, 2025.
