Tata Elxsi share price crashes 8% to 9-week low after Q1 earnings miss estimates

Tata Elxsi, the design and digital tech arm of the Tata Group, witnessed an 8% crash in its stock price, hitting a 9-week low of ₹5,660 apiece during early trade on Friday, July 11, after the company's June quarter revenue and net profit came in below analysts’ estimates.

The company reported revenue of ₹892.1 crore for the quarter ended Thursday, marking a decline of 1.8% quarter-on-quarter and 3.7% year-on-year. The decline was primarily driven by macroeconomic uncertainties and slower decision-making cycles in key markets, which impacted overall demand, especially in the media and healthcare segments.

EBITDA came in at ₹186.7 crore in Q1FY26, translating to a margin of 20.9%, down 10.1% from the previous quarter, which was largely driven by softer revenues, currency volatility, and higher onsite salary expenses.

Net profit stood at ₹144.4 crore, reflecting a sequential decline of 16.3% and a YoY drop of 22%, led by elevated operating costs, including transition-related investments for new deals secured in Q4FY25. Earnings per share (EPS) for the quarter was ₹23.18, down 16.3% sequentially and 21.6% year-on-year.

Despite the weak set of numbers, the management expects a steady improvement in the bottom line and margins through the year, as its two largest businesses, transportation and media & communication are expected to return to growth in Q2 FY26.

Brokerages retain Following the Q1FY26 results, brokerages maintained a cautious stance on Tata Elxsi as earnings once again missed expectations. Morgan Stanley retained its 'Underweight' rating with a target price of ₹4,660.

JPMorgan also maintained an 'Underweight' rating with a lower target of ₹3,800, highlighting a sharp miss on both revenue and margins for the fourth consecutive quarter. It flagged ongoing challenges in Healthcare due to client-specific issues.

Bernstein echoed the weak sentiment, maintaining an 'Underperform' rating with a price target of ₹4,130, citing continued tariff-related uncertainties and low growth visibility, particularly in the auto vertical.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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