Tata Elxsi’s growth story continues in Q2! Key takeaways from quarterly results

Tata Elxsi, a player in the design and technology services space, over the last decade, has seen growth in both revenues and profitability by getting into verticals and carving a niche for itself. The numbers for the second quarter demonstrate the growth sustaining. Over the last five years, the stock has gone up over 900 per cent. And in a difficult last year, it moved up by almost 35 per cent. 

A quick set of takeaways following the financial results for the second quarter of FY23:  

Business segments: Transportation has seen its growth story holding out with a growth of 3.8 per cent on a quarterly basis and 30.4 per cent on a yearly basis. This was on the back of deals in EV, autonomous, and adjacent segments.

The core business of media and communications also saw its revenue growing by 2.2 per cent and 22.2 per cent respectively for the same timelines. Healthcare, the smallest part of the company’s revenue, saw the numbers at 8.2 per cent and 55.9 per cent, indicating a significant headroom as technology will continue to play a more dominant role. 

The numbers: On a year-on-year basis, Tata Elxsi’s net profit was up 39 per cent to Rs 174.28 crore compared to Rs 125.33 crore for the second quarter of FY22. Meanwhile, sales rose 28.19 per cent to Rs 763.17 crore against Rs 595.33 crore. However, there was a 5.65 per cent dip in net profit for the most recent quarter (Q2) compared to the first quarter of the current fiscal (Q1).  

Thinking long-term: The earnings presentation outlines how the second quarter was “one of investing strongly in growth for the future.” The company had a net addition of 1,532 new employees, making it the highest in its history. Delving into what lies ahead, it says the second half has a strong order book and a healthy deal pipeline across key markets and industries. “Importantly, we have invested in capacity and capability building for engineering talent, leadership, and technology that will drive our next phase of growth,” it adds.