Tata Elxsi Q1 Results: Tata's 35-Yr-Old IT Giant Earns Rs 184 Crore Net Profit In Q1, Revenue Jumps 9% YoY

Tata Group-backed 35-year-old IT giant, Tata Elxsi has announced its June 2024 quarterly results for FY25. In Q1FY25, Tata Elxsi earned a net profit of Rs 184.07 crore, declining by 2.53% from Rs 196.93 crore in Q4FY24. Year-on-year, Q1 PAT dipped marginally from a profit of Rs 188.85 crore in Q1FY23.

On the other hand, revenue from operations stood at Rs 926.5 crore in Q1FY25, registering a growth of 2.3% QoQ and 9% YoY. In constant currency, the revenue growth is at 2.4% QoQ.

Meanwhile, operating margins stood at 27.2% in Q1FY25, while net margin came in at 26.3% in the quarter under review.

Manoj Raghavan, CEO and Managing Director, of Tata Elxsi, commenting on the company's performance in the first quarter of FY25, said, "We are happy to report a healthy performance in the first quarter with a top-line growth of 2.3% QoQ and 9.0% YoY."

He added, "We executed very well on operational excellence and fiscal discipline in this quarter towards bottom-line
performance, despite the impact of an exceptional one-off expense in the quarter and an increase in the effective tax rate with the change in SEZ benefits for one of our facilities."

On segment-wise performance, in Q1FY25, Tata Elxsi's transportation business grew strongly at 5.3% QoQ CC, aided by deal wins and ramp-up of Software Defined Vehicle (SDV) engagements. The media and communications business grew 0.5% QoQ CC, performing creditably in a difficult environment for the media and telecom industry. Also, System Integration services grew strongly at 8.7% QoQ CC.

Raghavan believes Tata Elxsi is well positioned to capture growth opportunities in the coming quarters as we continue to enable the continued transformation of the automotive industry and Software Defined Vehicles.

For the Media & Communication business, Raghavan said that the business has done well in a difficult business environment for this industry. He added, "We are building on our strong customer relationships, even as we roll out innovative growth and efficiency offerings for this industry. I am especially delighted with the NEURON platform-led deal from a leading North American telecom operator for their network transformation."

Furthermore, Raghavan pointed out that Tata Elxsi's Healthcare & Lifesciences business reported a decline in topline by 4.3% QoQ in constant currency. He said this is largely due to a delay in renewals of some projects at one of our large customers.

On the healthcare and life sciences, Raghavan said, ". We continue to add marquee logos and some exciting start-ups to our customer base, laying the foundation for sustained long-term growth along with next-gen service offerings. I am proud of our association and work with Tata Power Trust on the India Neurodiversity Platform which is being rolled out across multiple districts across the country. This is powered by TEcare, Tata Elxsi's Digital Therapeutics solution."

Looking ahead, Raghavan revealed that Tata Elxsi is investing strongly in digital, AI and Gen AI technologies across its verticals, targeting efficiency and quality in product engineering, as well as novel applications of Gen AI combined with domain and design expertise to solve complex business, product and engineering problems.

He added, "We step into the second quarter of this financial year with the confidence of a healthy deal pipeline, continued growth in our transportation business, new customer wins and expansion of business with strategic customers across verticals."

Tata Elxsi is amongst the world's leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare and Transportation.

Tata Elxsi is helping 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.

On BSE, Tata Elxsi's share price ended at Rs 7118.80 apiece, up by Rs 100.35 or 1.43% on July 10 with a market cap of Rs 44,333.35 crore.