Tata Elxsi Q2 net profit grows by 14.7%, revenue from operations up 8.3%

Tin Q2FY25, the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew incrementally by 1.1% to ₹266.4 crore. However, the EBITDA margin in Q2FY25 contracted to 27.9% from 29.9% in the corresponding period last year. Meanwhile, the net profit margin expanded to 22.5% from 21.9% in the same period the previous year.

Among the company’s segments, the System Integration & Support segment grew by 15.2% constant currency (CC) YoY, while the Software Development & Services (SDS) segment grew by 4.8% CC YoY.

Under the SDS verticals, Transportation saw growth of 16% CC YoY during the quarter. Meanwhile, Healthcare and Life Sciences declined by 11.8% CC YoY. The Media and Communications vertical was down 5.1% CC YoY.

During Q2FY25, the company made several key deals including a $50 million strategic deal with a global original equipment manufacturer (OEM) in Europe.

Manoj Raghavan, chief executive officer and managing director of Tata Elxsi, said, the company saw growth in profitability due to R&D incentives and tax credits. The company’s focus on offshore delivery and expansion in markets such as Japan has helped drive growth. Going ahead, the company has a healthy deal pipeline, steady growth, and recovery in key verticals.

“Our strategic focus on expanding our business in Japan, emerging markets, and capitalising on the India opportunity, is now starting to significantly contribute to our growth. During the quarter, our revenue from India has grown by 31.2% YoY, while Japan and emerging markets grew smartly at 81.9% YoY,” he said.

Shares of the company have declined by nearly 9.3% since the beginning of the year. The stock has gained over 8.3% in the past year.