Tata Elxsi confident of stronger H2 and margin recovery

Tata Elxsi reported operating revenue of INR 918.1 crores for Q2 FY26, showing 2.9% growth in actual currencies and 1% in constant currencies quarter-on-quarter. The company achieved an EBITDA of INR 193.3 crores (21.1% margin) and a PBT of INR 214.7 crores (22.2% margin). The U.S. market demonstrated strong growth of 7.9% quarter-on-quarter. The media & communication business grew 6.8% sequentially, boosted by large deals, while the transportation business, accounting for over 53% of revenues, grew 0.7%. Healthcare and life sciences saw a 2.3% decline due to the conclusion of major programs, but a strong pipeline is being built.

The company is targeting a utilization rate of 75% by the end of the current financial year, aiming for 80% in the next, to restore margins to earlier trajectories. H2 is expected to outperform H1, with a positive outlook for the automotive sector in Europe, Japan, and India. Despite a minor impact from a cybersecurity incident in Q2, management is confident of a recovery.

For FY27, Tata Elxsi projects double-digit growth in both healthcare and automotive segments, with aspirations for similar growth in media & communication. The company emphasizes its strong offshoring capabilities and its focus on software-defined vehicles, electrification, AD/ADAS, and infotainment.