Tata Elxsi, the Indian engineering research and development (ER&D) firm, on Thursday, October 9, reported its fourth straight quarterly decline in profit, as a slowdown in the global automotive sector and geopolitical uncertainties weighed on its key transportation business.
The company’s net profit fell 32.5% year-on-year (YoY) to ₹155 crore in the July–September quarter (Q2 FY26), compared to ₹230 crore in the same period last year. However, on a quarter-on-quarter (QoQ) basis, the design and technology services company saw a 7.2% rise in profit from ₹144.4 crore in Q1 FY26.
Tata Elxsi’s revenue from operations came in at ₹918.1 crore, down 3.9% YoY from ₹955.3 crore, though up 2.9% QoQ from ₹892.1 crore. The firm’s EBITDA rose 3.5% QoQ to ₹193.3 crore, with margins at 21.1%, compared to 27.9% a year ago and 20.9% in the previous quarter.
The transportation segment, which contributes the largest share of revenue and includes software and design services for global automakers and suppliers, witnessed a 9.9% YoY decline amid weak client spending and slower R&D investments. Analysts said the temporary production shutdown at Jaguar Land Rover (JLR) in the UK following a September cyberattack also weighed on Tata Elxsi’s performance this quarter.
ER&D firms like Tata Elxsi, which depend heavily on outsourced work from U.S. and European clients, have been under pressure as global automotive companies trim R&D budgets due to U.S. tariffs, supply-chain issues, and geopolitical risks.
Despite the challenges, the company’s management noted that long-term opportunities in design-led digital transformation remain intact, with continued traction in healthcare, media, and communications verticals.
Shares of Tata Elxsi closed 2.1% higher on Thursday ahead of the results announcement.
