Tata Elxsi Shares Drop After Weak Q3FY25 Earnings

Shares of Tata Elxsi plunged by 7.89% to Rs 5,935.05 per share on the BSE in intraday trade on Friday, following the company’s subdued third-quarter earnings for the financial year 2024-25 (Q3FY25).

The company reported a 13.3% quarter-on-quarter decline in net profit, which stood at Rs 199 crore for the period ending December 31, 2024, compared to Rs 229.4 crore in the previous quarter. Tata Elxsi’s revenue for the quarter decreased by 1.7%, totaling Rs 939.2 crore, down from Rs 955.1 crore in Q2FY25.

Operating Performance Declines

The company’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) also declined by 7.7%, falling to Rs 220.7 crore from Rs 239.2 crore in the September quarter. The EBITDA margin dropped to 24.2% from 25.7%, signaling a decline in profitability.

Positive Developments Amidst Weak Earnings

Despite the weaker-than-expected earnings, Tata Elxsi announced securing a multi-year contract with a US-based Multi-System Operator (MSO) to develop and manage their application portfolio. The company plans to scale this engagement over the coming quarters, which is seen as a positive development.

CEO Manoj Raghavan mentioned the company’s success in key markets, with revenue from India growing 21.9% YoY, while Japan and emerging markets saw a 66.8% YoY increase. He emphasized Tata Elxsi’s ability to navigate challenges like geopolitical uncertainty, currency fluctuations, and industry-specific issues in Europe and the US, and expressed optimism about future growth.

Stock Performance and Market Comparison

Over the last six months, Tata Elxsi’s stock has underperformed the broader market, falling 16%, and it has dropped 32% over the last year. In comparison, the BSE Sensex has lost 3% in the past six months and gained 7% in the last year.

At 9:54 AM on Friday, the stock was trading 7.51% lower at Rs 5,954.90, while the BSE Sensex was down 0.38%, trading at 77,323.46.