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Tata Elxsi shares drop 4% after Morgan Stanley sharply cuts target on Q4 topline missRevenue growth remained softer than estimates. Constant currency revenue rose 0.9%, below expectations of 1.5%. For the full year, constant currency revenue declined 5.5%.By Meghna Sen  April 22, 2026, 9:33:53 AM IST (Updated)2 Min ReadShares of Tata Elxsi Ltd. are trading 4% lower on Wednesday, April 22, after the engineering research and development firm reported its earnings for the fourth quarter of FY26.

Net profit more than doubled to ₹220 crore, compared with ₹109 crore in Q3FY26, which had been impacted by an exceptional loss of ₹95.7 crore linked to labour code changes. The recovery also marks a break from a five-quarter streak of profit declines.

The improvement was supported by growth in the company's transportation and media segments, along with large deal wins and strong client additions across key verticals.

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However, revenue growth remained softer than estimates. Constant currency revenue rose 0.9%, below expectations of 1.5%. For the full year, constant currency revenue declined 5.5%.

Q2FY25

Q3FY25

Q4FY25

Q1FY26

Q2FY26

Q3FY26

Q4FY26

Re Rev

955.08

939.17

908.3

892.1

918

953.5

993.8

Rev QoQ %

3.1%

-1.7%

-3.3%

-1.8%

2.9%

3.9%

4.2%

Rev YOY %

8.3%

2.7%

0.3%

-3.7%

-3.9%

1.5%

9.4%

EBITDA%

27.9%

26.3%

22.90%

20.90%

21.05%

23.30%

24.60%

PAT

229.43

199

172.4

144.36

154.8

109

220.35

Margins, on the other hand, came in stronger than expected, with EBIT margin at 22.3%, ahead of the estimated 21.5–22% range.

Recovery hopes intact, but outlook moderated

Brokerage firm Morgan Stanley has an 'Underweight' rating on Tata Elxsi and has cut its price target by 21% to ₹4,200 from ₹5,350 earlier. The brokerage said Q4 performance missed its estimates, although margins came in ahead of consensus.

Management has kept hopes of a recovery alive for FY27 but has moderated its growth expectations.

The company reported constant currency revenue growth of 0.9% QoQ in Q4FY26, below the estimated 1.5%, largely due to weakness in the healthcare segment.

EBIT missed Morgan Stanley's estimates by 3.4% but beat consensus by 4%, while net income came in ahead of both estimates, supported by a lower tax rate.

Morgan Stanley now expects 6.9% revenue growth in constant currency terms for FY27, down from its earlier forecast of 10.4%.

The company also announced a dividend of ₹75 per share.

Shares of Tata Elxsi ended 3.17% higher on Tuesday at ₹4,660, taking gains for the year so far to around 11%.Continue ReadingFirst Published: Apr 22, 2026 6:55 AM ISTTagsshare market todayTata Elxsi