Tata Elxsi shares slipped over 2% in early trade on Friday after the design and technology services company reported its fourth consecutive quarterly decline in profit. As of 9:19 AM, the shares were trading 0.18% lower at Rs 5,563.00.
The company’s net profit for the July–September quarter (Q2 FY26) fell 32.5% year-on-year (YoY) to ₹155 crore, compared to ₹230 crore in the same quarter last year. On a sequential basis, however, profit rose 7.2% from ₹144.4 crore in Q1 FY26, indicating a modest recovery in margins.
Revenue from operations stood at ₹918.1 crore, down 3.9% YoY from ₹955.3 crore, but up 2.9% quarter-on-quarter (QoQ) from ₹892.1 crore. Tata Elxsi’s EBITDA rose 3.5% QoQ to ₹193.3 crore, while EBITDA margins were at 21.1%, compared to 27.9% a year ago and 20.9% in the previous quarter.
The transportation segment — which remains Tata Elxsi’s largest revenue contributor — witnessed a 9.9% YoY drop due to weaker client spending and delayed R&D projects across global automakers. Analysts also pointed out that the temporary production shutdown at Jaguar Land Rover (JLR) in the UK following a September cyberattack further impacted the company’s performance during the quarter.
Engineering and R&D (ER&D) firms like Tata Elxsi have been facing headwinds as U.S. and European clients tighten R&D budgets amid rising tariffs, supply-chain disruptions, and broader geopolitical risks.
Despite the near-term challenges, Tata Elxsi’s management remains optimistic about long-term growth prospects, citing sustained demand for design-led digital transformation and continued traction in healthcare, media, and communications verticals.
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