Tata Elxsi lifts Q2 margin, but higher tax leaves profit flat QoQ
Standalone revenue rose +14.98% YoY as costs grew slower, while other income supplied 14.60% of pre-tax profit.
Filed 13 Oct 2026, 17:35 IST · after market close · Tata Elxsi Ltd (TATAELXSI)
Key takeaways
- Standalone revenue grew +14.98% YoY as expenses rose +13.72%, lifting operating margin by 0.86 percentage points to 21.92%.
- Standalone net profit was nearly flat QoQ at Rs 170.30 cr because the tax rate rose 2.16 percentage points to 28.77%.
- Operating margin recovered for a second quarter to 21.92% from 21.15% QoQ, but remained below the 24.61% recorded in Q4FY26.
Price around the results
Q2 revenue growth came with better cost control
Tata Elxsi’s standalone revenue increased +14.98% YoY and +3.38% QoQ to Rs 1,055.66 cr. Expenses grew more slowly, at +13.72% YoY and +2.38% QoQ, allowing operating profit to rise +19.70% YoY and +7.14% QoQ. Management said Media and Communications growth was supported by deal ramp-ups and new wins, while transportation saw continued traction in aerospace.
Margin improved despite salary revisions, but profit quality was mixed
Operating margin expanded by 0.86 percentage points YoY and 0.77 percentage points QoQ to 21.92%, as revenue grew faster than expenses. Management said salary revisions were implemented across the employee base during the quarter, while EBITDA margin still improved by 70 basis points QoQ. Other income accounted for 14.60% of pre-tax profit, and the higher tax rate offset much of the operating improvement, leaving net profit down 0.18% QoQ despite pre-tax profit growth of +2.86%.
Margin has recovered from the Q1FY27 dip
The operating margin rose from 20.93% in Q1FY26 to 24.61% in Q4FY26, then fell to 21.15% in Q1FY27 before recovering to 21.92% in Q2FY27. Management said it expects to sustain growth in the second half of FY27 while continuing investments in AI-first offerings and operational excellence.
No immediate market reaction after the after-close filing
The standalone results were filed after market close on 13 October 2026, so there is no reported reaction yet. After the previous eight results, the stock fell seven times and rose once, with a median absolute move of 4.78%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,056 cr | ₹1,021 cr | +3.38% | +14.98% |
| Other income | ₹35 cr | ₹41 cr | -15.80% | -28.58% |
| Expenses | ₹824 cr | ₹805 cr | +2.38% | +13.72% |
| Operating profit | ₹231 cr | ₹216 cr | +7.14% | +19.70% |
| Operating margin (%) | 21.92% | 21.15% | — | — |
| Interest | ₹4 cr | ₹3 cr | +31.25% | -11.63% |
| Depreciation | ₹24 cr | ₹22 cr | +6.20% | +0.85% |
| Profit before tax | ₹239 cr | ₹232 cr | +2.86% | +11.35% |
| Tax | ₹69 cr | ₹62 cr | +11.22% | +14.86% |
| Net profit | ₹170 cr | ₹171 cr | -0.18% | +10.00% |
| EPS (₹) | ₹27.34 | ₹27.38 | -0.15% | +10.02% |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Media and Communications revenue growth was led by deal ramp-ups across leading customers and new deal wins.
- The transportation business saw continued traction in adjacencies, particularly aerospace.
Guidance & outlook
- Tata Elxsi expects to sustain growth in the second half of FY27 while continuing investments in AI-first offerings and operational excellence.
New orders
- A leading Asian auto OEM selected Tata Elxsi for a multi-year cloud-based telematics and connected vehicle ecosystem programme.
New initiatives
- Tata Elxsi entered a strategic collaboration with Sarla Aviation to develop Shunya, an indigenous electric vertical take-off and landing aircraft.
- Tata Elxsi joined Startup Autobahn India as a foundation member to drive open innovation in automotive and mobility.
- Tata Elxsi launched TELIPORT Season 4, a national innovation challenge focused on AI-first innovation, design and product engineering.
- Tata Elxsi is investing in Gen AI-powered offerings and services across its chosen verticals and domains.
Problems & risks
- Tata Elxsi reported resilient growth despite operating in a volatile macro environment.
- Salary revisions were implemented across the entire employee base during the quarter, despite which EBITDA margins improved.
What to watch
- Whether standalone operating margin holds above 21.92% after the quarter’s salary revisions.
- Whether the tax rate moves below the current 28.77% in the next quarter.
- Whether Media and Communications sustains its 3.40% QoQ constant-currency growth.