Tata Elxsi reported a challenging first quarter for FY26, with its consolidated net profit falling around 22% year-on-year to ₹144 crore, compared to ₹184 crore in the same quarter last year. Sequentially, profit was also down 16% from ₹172 crore in Q4 FY25, largely due to muted client demand and reduced R&D spending, especially in the automotive segment.

Revenue from operations declined by nearly 4% YoY to ₹892 crore, missing expectations. The company’s EBITDA stood at ₹186.7 crore with a margin of 20.9%, while profit before tax came in at ₹196.3 crore. Despite the top-line pressure, Tata Elxsi maintained healthy profitability levels, thanks to improved operational efficiency.

The transportation vertical, which has been under pressure for several quarters, showed signs of recovery with sequential growth of about 3.7%, supported by new deal ramp-ups from global OEMs. However, on a year-on-year basis, revenue from this segment was still lower. The media & communications and healthcare verticals remained soft this quarter due to project delays and slower deal conversions, but the management expects these to pick up pace in Q2.

Tata Elxsi’s CEO expressed optimism for the upcoming quarters, citing a strong pipeline of large deals, better utilization, and a continued focus on operational discipline. Despite short-term headwinds, the company believes it is well-positioned to bounce back as client budgets normalize.

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