Tata Elxsi April-June Profit Drops 16% On Quarter On Weak Demand

Tata Elxsi Ltd. on Thursday reported a 16% sequential fall in net profit to ₹1.44 billion for the June quarter, weighed down by continued weakness in demand and macroeconomic uncertainty. This was the sharpest quarterly decline in profit since April–June 2019.

Revenue fell nearly 2% on quarter to ₹8.92 billion, marking the third straight sequential drop. Earnings before interest, tax, depreciation, and amortisation declined to ₹1.87 billion from ₹2.08 billion in the previous quarter, with the EBITDA margin narrowing to 20.9% from 22.7%.

The software development services segment—the largest contributor—saw revenue slip 0.6% on quarter to ₹8.72 billion, while revenue from system integration and support services dropped to ₹196.5 million from ₹308.8 million.

CEO Manoj Raghavan said the quarter was impacted by weak discretionary spending and macroeconomic headwinds across geographies. In constant currency terms, revenue fell 3.9% on quarter.

The transportation segment was the only bright spot, rising 3.7% in reported terms, aided by strong deal momentum with clients such as Mercedes-Benz, Suzuki, and a European original equipment maker. However, media and communications revenue declined 5.5%, and healthcare fell 6.7% due to project transitions and pricing pressures.

Raghavan said the company expects sequential growth to resume from the September quarter, driven by deal ramp-ups, better utilisation, and improving margins.

Earnings before interest and tax dropped 11.2% on quarter to ₹1.62 billion, with the EBIT margin narrowing to 18.2% from 20.1%. The India revenue share fell to 19.8%, while Europe rose to 39.5%.

Headcount declined to 12,127, and attrition rose to 15%—the highest in four quarters.