Near-term worries for Tata Elxsi stock on weak transportation outlook

Key deal wins during the quarter included an offshore development centre set up for Suzuki Motors to accelerate software development for the next generation

Tata Elxsi (TelX) reported a weak Q3FY25, with a sharp deceleration in the transportation vertical.

 

However, recent deals in the Asia-Pacific (APAC), higher mix of original equipment makers (OEMs) and partnership with Qualcomm will improve growth.

 

FY25 is the third successive financial year of revenue growth deceleration and second successive financial year of profit deceleration.

 

Q3FY25 revenue of $111 million was flat sequentially and 2 per cent higher year-on-year (Y-o-Y) on constant currency (CC) terms. It decelerated from +8.4 per cent Y-o-Y CC and +5.1 per cent Y-o-Y in Q1 and Q2, respectively.

 

The transportation vertical (55 per cent of