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Tata Elxsi Q1 results preview: revenue may fall 3% QoQ, margin dip likely

Tata Elxsi Q1 results preview: revenue may fall 3% QoQ, margin dip likely

Tata Elxsi Q1 results preview: Tata Group's IT solutions provider is set to announce its results for the three months ended on June 30, 2025 on Thursday, July 10, 2025.

Pawan Kumar Nahar
Pawan Kumar Nahar
  • Updated Jul 9, 2025 1:22 PM IST
Tata Elxsi Q1 results preview: revenue may fall 3% QoQ, margin dip likely

IT solutions provider Tata Elxsi is set to announce its results for the three months ended on June 30, 2025 on Thursday, July 10, 2025. Brokerage firms are expecting a muted performance from the Tata Group firm in the Q1FY25 and are expecting up to 33 per cent fall in its stock price, as per their revised targets.

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Brokerage firms are expecting a 2-3 per cent sequential (QoQ) fall in its constant currency (CC) revenue, while Ebit margins are likely to drop sharply, falling in the range of 22-23 per cent for the quarter. Net profit may contract 8-10 per cent on QoQ basis, while Ebitda may remain flat for the period.

Nirmal Bang Institutional Equities expects 3 per cent CC QoQ fall revenue due to weakness in transportation and media vertical. Large deals continue to become part of the deal pipeline Expect margins to expand by 70bps due to tight cost control and absence of cost pressure, it said. It is penciling in 350 bps fall in Ebit margins to 20.8 per cent for the quarter.

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"Demand outlook for transportation and media vertical, Mercedes GCC deal win, rare earth material curb by China impact, and margin levers and aspiration for FY26 shall be key monitors for the results," it added. Nirmal Bang has maintained its 'hold' rating on the stock but trimmed its target price to Rs 6,119.

ICICI Securities expects revenue to decline 2.9 per cent QoQ CC due to continued weakness in automotive and communication. It has started working on large consolidation deals won in the previous quarter in the communication vertical but it will start adding to revenue from the next couple of quarters. Healthcare vertical to show healthy growth on ramp-ups of new deals won in previous quarters, it said.

"We await management commentary on outlook in auto and communication vertical - any signs of improvement in demand, pace of ramp-up of existing large deals wins, puts and takes for FY26 margins, impact due to curb on rare earth metals by China, details about Mercedes GCC deal - size, tenure and margin impact" ICICI Securities, downgrading the stock to 'sell' with a target price of Rs 4,510.

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Shares of Tata Elxsi dropped nearly a per cent to Rs 6,110.50 on Wednesday, with its market capitalization slipping barely holding Rs 38,000 crore mark. The stock had settled at Rs 6,172.05 on Tuesday. The stock is down 33 per cent from its 52-week high at Rs 9,082.90, hit in August 2024.

Kotak Institutional Equities is penciling in another weak quarter with revenue decline, primarily led by mid-to-high single-digit decline in media & communications vertical and modest decline in transportation. Transportation would be impacted by the general weak spend environment and moderating spends at top clients. EBIT margin will be down by 10 bps qoq due to large deal transition costs and top-line performance, it said.

"We expect a solid FY2026E on profitability. Revenue growth will be weaker due to rationalization of low margin businesses. Weak demand combined with company-specific factors in Europe will contribute to the weak quarter. We forecast a stable EBIT margin despite weak growth. Aggressive cost management combined with currency tailwinds will aid margins. We expect large deal TCV to be in the $1.2-1.3 billion range, a strong outcome noting the recent aggression on large deal pursuits," it added.

B&K Securities is expecting Tata Elxsi to report a 2.6 per cent YoY fall in revenue at Rs 902.4 crore, while Ebitda margin may contract to 22.5 per cent from 27.2 per cent a year ago. Net profit is seen at Rs 158.4 crore, down 14 per cent YoY and 8.2 per cent QoQ. It also has a 'sell' rating on the stock

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jul 9, 2025 1:22 PM IST
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