Tata Elxsi shares were under pressure on Wednesday after the company reported a weak set of numbers in the first quarter of FY27 (Q1FY27).
The stock dropped as much as 6.12% to hit a 52-week low of Rs 3,473.75.
At 9:25 am, it was trading 4.82% lower at Rs 3,522 per share. In contrast, the BSE Sensex was up 0.67% at 77,575.
Tata Elxsi Q1FY27 Results
Tata Elxsi's consolidated net profit fell 22.6% QoQ to Rs 171 crore in Q1FY27, missing analysts' estimate of Rs 197 crore. Profit stood at Rs 220 crore in the previous quarter (Q4FY26).
Revenue grew 2.8% sequentially to Rs 1,021 crore, largely in line with the Street expectation of Rs 1,024 crore.
ALSO READ: Tata Elxsi Q1 Results: Net Profit Slides 23%, Margins Narrow
Earnings before interest, tax (EBIT) declined 12.8% QoQ to Rs 193.8 crore from Rs 221.3 crore. Consequently, EBIT margin narrowed to 19% from 22.3% in Q4FY26.
Management Commentary
In a post-earnings call, management said the transportation vertical is expected to return to growth in the coming quarters. The company is also pursuing a few large consolidation deals in the media and communications vertical.
Tata Elxsi further said it should be able to disclose revenue from its adjacent operations by the end of the year.
Brokerage Views
Kotak Securities
- Maintains Sell, cuts target price to Rs 3,000 from Rs 3,800
- Growth struggles; profitability resets
- Another muted quarter due to sustained weakness in automotive
- Retains high single-digit growth outlook for FY27E
- Recent large deals and investments weigh on profitability
- Margin reset drives 10-14% earnings cuts for FY27-29
JPMorgan
- Maintains Neutral, cuts target price to Rs 3,500 from Rs 3,600
- Q1 print mixed; Beat on revenues but margins missed sharply
- Margin weak due to large deal transition, ramp up costs, onsite delivery investments etc
- Some of these costs will go away over next 1-2 quarters
- Cut earnings by 1-13% mainly driven by 7-330bps margin cuts over FY27-29
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