Design and technology services provider maintains margins while facing macroeconomic uncertainties and reduced R&D spending across key markets
10 Jul 2025 | 1182 Views | By Angitha Suresh
Tata Elxsi reported operating revenue of Rs 892.1 crore for the first quarter of financial year 2025-26, ending June 30, 2025. The company maintained an EBITDA margin of 20.9% and profit before tax margin of 21.1% during a period marked by market uncertainties.
The Bangalore-based design and technology services ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Tata Elxsi reported operating revenue of Rs 892.1 crore for the first quarter of financial year 2025-26, ending June 30, 2025. The company maintained an EBITDA margin of 20.9% and profit before tax margin of 21.1% during a period marked by market uncertainties.
The Bangalore-based design and technology services provider posted profit after tax of Rs 144.4 crore with a PAT margin of 15.5%. EBITDA for the quarter stood at Rs 186.7 crore, while profit before tax reached Rs 196.3 crore.
The company's transportation vertical, which accounts for over 50% of total revenue, recorded 3.7% quarter-on-quarter growth in actual currency terms. This segment remained flat in constant currency terms, marking a recovery from previous quarters.
CEO and Managing Director Manoj Raghavan attributed the transportation business recovery to large deal wins secured in the previous quarter, including software-defined vehicle projects with Mercedes-Benz and a European original equipment manufacturer, along with a contract with Suzuki.
The company executed two strategic deals in the quarter as part of its adjacency strategy. Management expects continued growth in the transportation business throughout the year, supported by secured deals, a pipeline of large contracts, and new customer acquisitions.
The Media and Communication Business reported a 5.5% decline quarter-on-quarter in constant currency terms. The company attributed this drop primarily to transition investments related to large deals won in the previous quarter.
Despite the decline, Tata Elxsi secured a multi-million dollar design-digital contract with a US technology company for next-generation AI and product-feature development. The company expects the segment to return to growth in the second quarter and beyond as large deals ramp up.
The Healthcare and Lifesciences segment declined 6.7% quarter-on-quarter in constant currency, primarily due to tariff-related impacts on medical device engineering programs and reduced spending by two key US customers.
The segment secured two contracts during the quarter, including partnerships with a global pharmaceutical and biotech company from Europe and a medical technology company from Japan. Management anticipates recovery in the US region during the second half of FY26.
Tata Elxsi expects steady improvement in bottom-line performance and margins throughout the year as its two largest business segments return to growth. The company plans to leverage ready capacity and capabilities built over previous quarters to improve utilization rates.
The company launched a redesigned website during the quarter, reflecting its AI-first and human-centric approach to designing experiences. The initiative aligns with the company's strategy of moving beyond technology and products to focus on purpose-driven experiences.
The company's Design and Systems Integration teams completed a project for the Bharat Pavilion at World Expo 2025 in Osaka, Japan. The pavilion was ranked among the top five exhibitions alongside those from the US, Italy, Japan, and France.
Tata Elxsi provides design and technology services across automotive, broadcast, communications, healthcare, and transportation industries. The company helps customers reimagine products and services through design thinking and digital technologies including IoT, cloud, mobility, virtual reality, and artificial intelligence.
The company trades on the BSE under scrip code 500408 and on the NSE under the symbol TATAELXSI.