Tata Elxsi Q2 FY27 results: net profit up 10.0% to ₹170.30 crore, revenue up 15.0%

How did Tata Elxsi perform in Q2 FY27?

Tata Elxsi’s standalone revenue was ₹1,056 crore in Q2 FY27, up ₹137.56 crore or 15.0% from Q2 FY26 and ₹34.55 crore or 3.4% from Q1 FY27. EBITDA was ₹231.41 crore, up ₹38.08 crore or 19.7% year on year and ₹15.42 crore or 7.1% sequentially; the margin was 21.9%, compared with 21.1% a year earlier and 21.2% in the previous quarter.

Profit before tax was ₹239.10 crore, up 11.4% year on year and 2.9% sequentially, while the company reported a net profit of ₹170.30 crore. Net profit was up ₹15.48 crore or 10.0% from Q2 FY26 but down ₹0.30 crore or 0.2% from Q1 FY27. Basic EPS was ₹27.34, against ₹24.85 a year earlier and ₹27.38 in the previous quarter. The figures are on a standalone basis.

What changed in Tata Elxsi's costs and profit?

Total expenses rose ₹99.21 crore or 13.2% year on year to ₹851.47 crore, mainly reflecting higher employee cost, other expenses and depreciation. Employee cost increased ₹81.28 crore or 15.1% to ₹620.10 crore, other expenses rose ₹17.11 crore or 15.1% to ₹130.71 crore, and cost of materials increased ₹1.08 crore or 1.5% to ₹73.44 crore. Finance costs fell ₹0.47 crore or 11.6% to ₹3.57 crore, while depreciation rose ₹0.20 crore or 0.9% to ₹23.65 crore.

Other income declined ₹13.97 crore or 28.6% year on year to ₹34.91 crore, while tax increased ₹8.90 crore or 14.9% to ₹68.80 crore. There was no exceptional item. Despite the higher employee cost and lower other income, EBITDA increased ₹38.08 crore to ₹231.41 crore and the margin expanded 0.8 percentage points to 21.9%. The company’s filing said improved EBITDA margins reflected operational efficiencies despite salary revisions across the employee base.

How did the first half of FY27 go?

For H1 FY27, Tata Elxsi reported standalone revenue of ₹2,076.76 crore, up ₹266.56 crore or 14.7% from H1 FY26. Total income was ₹2,153.13 crore, up 13.5%, while profit before tax rose 14.7% to ₹471.55 crore. The company reported a net profit of ₹340.9 crore for the first half, compared with ₹299.19 crore in the year-ago period.

H1 FY27 EPS was ₹54.72, up ₹6.69 or 13.9% from H1 FY26 EPS of ₹48.03. The increase in net profit was ₹41.71 crore. These first-half figures are standalone, matching the basis used for the quarterly result.

What do the balance sheet and cash flow show?

At 30 September 2026, total assets were ₹3,849.45 crore, down from ₹3,962.54 crore at 31 March 2026, while total equity fell from ₹3,041.34 crore to ₹2,912.79 crore. The company reported no borrowings at either balance-sheet date. Cash was ₹162.03 crore, lower than ₹194.52 crore at the end of the previous financial year; trade receivables were ₹1,071.17 crore and trade payables ₹166.96 crore.

H1 FY27 operating cash flow was ₹373.85 crore, compared with ₹265.79 crore in H1 FY26. Investing cash flow was ₹99.45 crore against ₹216.9 crore, financing cash flow was negative ₹501.57 crore against negative ₹499.98 crore, and capital expenditure was ₹18.0 crore compared with ₹2.27 crore. The figures show higher operating cash generation and lower investing cash flow during the first half.

How has Tata Elxsi done over the last 8 quarters?

Revenue rose in each of the last four quarters, reaching ₹1,055.66 crore in Q2 FY27 from ₹939.17 crore in Q3 FY25. The period low was ₹892.1 crore in Q1 FY26, and the latest quarter was the highest shown. EBITDA margin bottomed at 20.9% in Q1 FY26 and peaked at 26.3% in Q3 FY25 before recovering to 21.9% in Q2 FY27.

Net profit reached its highest level in Q4 FY26 at ₹220.35 crore and its lowest in Q3 FY26 at ₹108.89 crore. It was ₹170.30 crore in Q2 FY27, marginally below ₹170.6 crore in Q1 FY27. Revenue has continued upward, while profit has been broadly stable sequentially and margin has recovered from its recent low.

Which businesses drove the quarter?

Software development & services generated revenue of ₹1,027.87 crore in Q2 FY27, up 15.0% from ₹893.82 crore in the year-ago quarter. Its EBIT was ₹313.44 crore, compared with ₹267.24 crore, and the reported segment margin was 30.5%.

System integration & support services recorded revenue of ₹27.79 crore, up 14.5% from ₹24.28 crore a year earlier. EBIT rose to ₹5.92 crore from ₹2.99 crore, with a reported margin of 21.3%. The company’s presentation also showed constant-currency segment growth of 7.8% for software development & services and 6.9% for system integration & support year on year.

What else did the company announce?

Tata Elxsi filed audited standalone financial results for the quarter and half-year ended 30 September 2026 on 13 October 2026. The board approved and took the results on record, and the auditors’ report carried an unmodified opinion. The company also filed its investors’ presentation and fact sheet for the quarter and half-year.

On the same day, the board approved Deloitte Haskins & Sells Chartered Accountants LLP as statutory auditor for five consecutive years, from the conclusion of the 38th AGM in 2027 until the conclusion of the 43rd AGM in 2032, subject to shareholder approval. BSR & Co. LLP will continue as auditor until the conclusion of the 38th AGM in 2027. The same-day filings did not announce a dividend or fund raise.

What did Tata Elxsi's management say?

Management said revenue grew 2.3% in constant currency sequentially, with transportation up 2.0%, media and communications up 3.4%, and healthcare and life sciences up 3.5%. It expects H2 FY27 to be better than H1 across most verticals, including transportation excluding Europe, media and communications, and healthcare, but provided no quantitative guidance under company policy.

Management said EBITDA margin is expected to improve gradually over the next 2–3 quarters through operational leverage, higher utilisation and pyramid rebalancing. Utilisation was 78% against a peak of 81–82%, and employee cost was not expected to move materially for the rest of FY27 except for selective hiring, as the wage-hike cycle ended in Q2.

Management identified Europe automotive softness, customer decision-making delays, a shorter Q3 with possible customer furloughs, AI transformation budgets competing with discretionary ER&D spending, wage-hike pressure, and talent-retention pressure from GCC ramps as risks. It cited wins in telematics, the Sarla Aviation eVTOL programme, a GenAI virtual assistant and home dialysis. CEO Manoj Raghavan said there was a plan to address pyramid-related changes made over the last four to six quarters.

How did Tata Elxsi shares react?

Tata Elxsi’s shares rose 5.1% within 5 minutes, 5.8% within 15 minutes and 6.4% within 30 minutes after the filing appeared after market hours. The stock closed 5.9% higher on the reaction day from its pre-results close, compared with a 0.5% median rise for other Computers - Software & Consulting stocks.

By the next day’s close, the stock was up 8.0% from its pre-results close, against a 0.8% median rise for the industry, a 7.2 percentage-point excess return. By the fifth session’s close, it was up 12.3% cumulatively, compared with a 1.3% decline for the industry median. The Nifty Smallcap 250 was down 1.2% by the next day’s close and down 5.5% over the five-session period.

How did other Computers - Software & Consulting companies do?

Tata Elxsi was compared with 33 Computers - Software & Consulting companies that filed this quarter. Their median revenue growth was 12.9%, below Tata Elxsi’s 15.0%. Of the other companies, 19 grew more slowly than Tata Elxsi and 14 grew faster. Twenty of 32 peers reported higher profit, while Tata Elxsi’s standalone net profit rose 10.0% year on year.