Tata Elxsi Q2 Results Preview: How Will Tata's 36-Year-Old IT Company Perform? BUY/SELL This Midcap Stock?

Tata Group-backed 36-year-old midcap tech company Tata Elxsi will announce its Q2 results for FY26 on October 9, 2025. Accordingly, Tata Elxsi shares will be in focus on BSE and NSE. Analysts have given mixed opinions on Tata Elxsi's Q2 earnings; however, key factors that would impact them are the JLR cyberattack incident, transportation business performance, the SDS segment, and deal transitions. Ahead of Q2, Tata Elxsi shares gained by over 1.3% on BSE during the October 8th session.

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Analysts at Kotak Institutional Equities is expecting modest uptick in Tata Elxsi's top-line front due to large deal ramp-ups in transportation and media & communications verticals offset by weakness in JLR and hi-tech and medical devices vertical.

On other hand, analysts at PL Capital are predicting revenue decline of 1.9% QoQ CC and 1.6% QoQ in USD impacted by halt of operations of JLR due to cyber security incident.

Meanwhile, Kotak analysts believe EBIT margin may improve by 60 bps qoq due to the absence of deal transition costs and operating efficiencies. But the PL analysts are estimating EBIT margin to decline by 80 bps QoQ due to weak quarterly performance.

Nonetheless, Kotak predicts revenue of Rs 955.1 crore in Q2FY26, which would be 4.3% YoY down by up by 2.5% QoQ, EBIT margin is estimated at Rs 239.3 crore, declining by 28% YoY but up by 6% sequentially. Adjusted net profits is forecasted at Rs 229.4 crore, which could translate to drop of 33.7% YoY but upside of 5.3% QoQ. In constant currency, revenue growth is seen at 5.1%.

Key factors to focus in Tata Elxsi's Q2 Results are:

As per Kota, investors should focus on --- (1) overall demand outlook in SDS segment and FY2026 growth aspirations; (2) commentary on engagements with JLR and other clients in transportation; (3) outlook on R&D spends by automotive clients in the wake of multiple business uncertainties; (4) outlook of media & communications vertical; and (5) progress on scale-up of adjacencies in each of the three focus verticals.

"Key monitorable will be commentary for recovery in transportation segment and resumption of JLR operations," said PL's analysts.

Tata Elxsi posted a net profit of Rs 144.36 crore in the quarter ending June 2025. The PAT dropped by 21.6% from a net profit of Rs 184.07 crore in the June 2024 period. The latest net profit also plunged by 16.3% from Rs 172.41 crore in the March 2025 quarter.

Meanwhile, consolidated revenue stood at Rs 892.09 crore in Q1FY26, declining from Rs 926.45 crore in Q1FY25 and Rs 908.33 crore in Q4FY25. During the quarter under review, EBITDA came in at Rs 186.7 crore, while its margin is at 20.9%.

Tata Elxsi Share Price:

After market hours of October 8th, Tata Elxsi share price closed at Rs 5459.75 apiece, up by 1.33% on BSE with market cap of Rs 34,010.18 crore. The stock's 52-week high and low is at Rs 8,025 apiece and Rs 4,601.05 apiece respectively. Its return on equity is whopping at 29.97%.

Tata Elxsi Share Price Recommendation:

Kotak has suggested SELL on Tata Elxsi for a target price of Rs 4,000. Similarly, PL Capital has recommended SELL for a target price of Rs 4,390.

YTD, the stock is down by 19.2% on BSE.

About Tata Elxsi Limited:

Tata Elxsi began its journey on May 5, 1989, in Bangalore, the Silicon Valley of India, with a vision to develop and promote advancements in electronics, embedded systems, and software. Now, Tata Elxsi amongst the world's leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare and Transportation.

Over the years, Tata Elxsi has continued to enable customers reimagine their products and services through design thinking and application of digital technologies such as IoT (Internet of Things), Cloud, Mobility, Virtual Reality and Artificial Intelligence.

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