Tata Elxsi falls 6% post Q1, brokerages bearish, see up to 16% downside

The company reported net profit of Rs 170.6 crore for the quarter ended June 30, 2026, marking a growth of 18.2 per cent year-on-year.

Tata Elxsi Q1 results review: Tata Elxsi reported its Q1FY27 results after market hours on Tuesday, delivering in-line performance for the April–June quarter (Q1FY27). The tech giant's earnings were led by the company's Media and Communication which recorded a growth of 2.9 per cent quarter-on-quarter (QoQ).

 

However, the tech giant's counter came under pressure on Wednesday. At 10:25 AM, Tata Elxsi share price was trading 4.69 per cent lower at ₹3,524 per share on NSE. In comparison, Nifty 50 was up 0.67 per cent at 24,214.25. In intraday trade, the stock declined 6.16 per cent to touch the day's low at ₹3,469.70 per share.

 

Tata Elxsi Q1 results highlights

 

• The company reported net profit of  ₹170.6 crore for the quarter ended June 30, 2026, marking a growth of 18.2 per cent year-on-year (YoY). 

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For the June quarter, revenue from operations rose 14.5 per cent YoY and 2.8 per cent sequentially to Rs. 1,021.1 crore.

 

The company's operating performance remained robust, with EBITDA rising 15.7 per cent year-on-year to  ₹216 crore. The company reported an EBITDA margin of 21.2 per cent.

 

The company's sales rose 14.46 per cent to  ₹1021.11 crore in the quarter ended June 2026 as against  ₹892.10 crore during the previous quarter ended June 2025. 

 

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Brokerages’ view on Tata Elxsi post Q1 Results

 

Motilal Oswal | Sell | Target ₹3,100

 

Motilal Oswal noted that the first quarter does little to change the broader growth picture. The brokerage highlighted that revenue grew 1.3 per cent QoQ CC, broadly in line with expectations, but the improvement was largely driven by Media & Communications, while Transportation and Healthcare remained weak. "We believe meaningful growth will require a recovery in the larger Transportation business (55 per cent of revenue), where spending remains cautious, particularly across Europe," the brokerage noted.

 

It further added that valuation continues to discount a stronger recovery than what is visible. MOFSL believes that revenue recovery remains concentrated in a few pockets, while Transportation demand has yet to turn and margins remain below historical levels. 

 

The brokerage believes Tata Elxsi's current valuation already reflects much of its expected growth. The stock is trading at 28 times its estimated earnings per share for FY27 and 24 times its estimated EPS for FY28, based on consensus estimates. At these valuation levels, the brokerage believes there is limited room for any earnings miss or operational disappointment, as expectations are already high. In the same light the brokerage has reduced its target price up to 16 per cent to ₹3,100 for the counter.

 

P L Capital | Reduce | Target ₹3,350

 

P L Capital noted that Tata Elxsi delivered a mixed Q1FY27 performance. Revenue grew by 1.3 per cent Q-o-Q CC, while EBIT margin declined sharply by 330 bps Q-o-Q to 19.0 per cent, "below our and consensus estimates. Revenue growth was driven by the ramp-up of earlier wins in the M&C vertical."

 

The brokerage noted that large deal ramps require higher upfront investments through increased onsite presence, elevated subcon costs and transition expenses, which impacted margins by 150 bps Q-o-Q in Q1 and are expected to recover by Q4FY27. Margins were further impacted by 220–230 basis points Q-o-Q owing to structural investments in Onsite sales and delivery personnel, AI infra and tools, higher provisioning related to a client bankruptcy, and elevated visa-related costs, which should recoup gradually over the medium to long-term. 

 

However, factoring in the weak margin performance and continued investments, the brokerage reduced its FY27E and FY28E EBIT margin estimates by 130 bps and 110 bps to 20.0 per cent and 21.3 per cent, respectively.  Check here:  Top Gainers Today | Top Losers Today 

 

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