Tata Elxsi Q3 results: Net profit declines 30% QoQ to ₹109 crore, revenue advances 3.9%

In the quarter-ago period, the design and technology services company had clocked a profit of ₹154.8 crore, it said in a regulatory filing.

However, its bottom line was impacted by a one-time exceptional item on account of the implementation of new labour codes. Furthermore, its profit after tax (PAT) for the reporting quarter, barring the one-time exception expense, stood at ₹179.1 crore.

Its revenue from operations advanced 3.9% sequentially to ₹953.5 crore for the December quarter of FY26, compared to ₹918.1 crore in the second quarter of the current fiscal year (Q2FY26).

Its software development and services segment, which contributes 97.2% to total revenue, grew 3.5% QoQ in constant currency (CC) terms, while its system integration and support segment, which makes up 2.8% of the revenue mix, fell 6% QoQ.

Tata Elxsi’s revenue growth was led by its transportation business (contributing 56.6% to its revenue), which grew 7.3% sequentially.

Commenting on the results, Manoj Raghavan, CEO and Managing Director, Tata Elxsi, said: “Growth was led by our transportation business, with accelerated ramp-ups in SDV-led OEM deals won earlier in the year, and normalisation of workstreams and programs with a strategic OEM client that was impacted in the previous quarter.”

Its media and communications vertical, which makes up 31.1% of the total revenue, saw a 1.3% QoQ decline, and the healthcare and life sciences segment (contributing 10.8% to revenue) slumped 4.3% sequentially.

Both the verticals were impacted by seasonal furloughs and some key deal awards that were delayed at the end of the quarter.

“Among regions, growth was led by Europe and the US with broad-based growth across key accounts and verticals,” Raghavan said.

At an operational level, its EBITDA (earnings before interest, tax, depreciation and amortisation), also known as operating profit, stood at ₹222.2 crore in the December quarter, marking a 14.95% sequential jump from ₹193.3 crore in the September quarter.

Furthermore, its EBITDA margin expanded to 23.3% during the reporting period, as against 21.1% in Q2FY26.

“This was led by operational and delivery excellence, and improved utilisation,” Raghavan added.

During the quarter under review, its headcount was at 11,594, down by 2.99% from 11,951 in the September quarter.

Its attrition rate increased to 15.6% from 15.4% sequentially.

Shares of Tata Elxsi closed 1.75% higher at ₹5,793 per unit on the National Stock Exchange (NSE) on Tuesday. However, the results were announced after the market closed.