Tata Elxsi Q3 Results Preview: The 36-year-old midcap technology company of Tata Group, is likely to record mild growth in both revenue and margins during the third quarter of FY25. Tata Elxsi will announce its Q3FY25 earnings report on Thursday, January 9. Ahead of the result, Tata Elxsi's stock price witnessed sharp selling pressure.
Tata Elxsi Share Price:
This Tata midcap stock ended at Rs 6472.75 apiece on BSE, down by 1.06% with a market capitalisation of Rs 40,314.45 crore on January 8. The stock's 52-week high and low is at Rs 9,082.90 and Rs 6,285.05 respectively.
The company's price-to-equity ratio is at 49.88x, while the return on equity is at 32.85%.
Tata Elxsi Q3 Results Preview:
In its regulatory filing, Tata Elxsi announced that a meeting of the Board of Directors of the company will be held on Thursday, January 09, 2025, inter alia, to consider the audited financial results of the Company for the quarter and nine months ending December 31, 2024.
In its Q3 preview note, Kotak Institutional Equities said, "We forecast revenue growth of 0.5% c/c qoq driven by an uptick in healthcare & medical devices and expect muted trends in transportation vertical and media & communications. Transportation would be impacted by furloughs and moderating spending growth at top clients. Media clients remain cautious on incremental spending but some improvement in EM telecom clients would offset the weakness in media."
Further, the brokerage believes TELX might lower its aspiration for 4QFY25 (double-digit yoy growth for 4QFY25 earlier). It added that the EBIT margin was up by 20 bps qoq aided by marginal improvement in utilization.
Key investors' focus will be on --- (1) overall demand outlook in the SDS segment; (2) commentary on engagements with clients other than JLR in transportation; (3) outlook on R&D spends by automotive clients in CY2025; (4) outlook of media communications vertical; (5) outlook on engagements with large clients in the healthcare & medical devices vertical; (6) progress on scale-up of adjacencies in each of the three focus verticals, as per the brokerage.
During Q2FY25, the company posted revenue growth of 3.1% QoQ to Rs 955.1 crore, while PAT was at Rs 229.4 crore higher by 24.6% QoQ. Transportation grew strongly at 8.8% QoQ, aided by large deals and growth in SDV and OEM business. EBITDA margins expanded by 70 bps to 27.9%.
Ahead of earnings, Tata Elxsi announced that it signed a Memorandum of Understanding (MoU) with CSIR-National Aerospace Laboratories (CSIR-NAL) to establish a Strategic Partnership for Advanced Air Mobility. This collaboration is focused on driving innovation in emerging areas such as Unmanned Aerial Vehicles (UAVs), Urban Air Mobility (UAM), and electric vertical take-off and landing (VTOL) aircraft. The partnership combines NAL's deep aeronautical expertise and Tata Elxsi's technological capabilities in electrification, AI/ML, sensor fusion, and certification processes to support global and Indian markets.
About Tata Elxsi:
Tata Elxsi commenced its business on 5th May 1989 in Bangalore, the Silicon Valley of India, to develop and promote applications of electronics, embedded systems, and software. The Mission was to foster innovation in the fast-emerging IT market and accelerate the adoption of leading-edge technologies. Today, Tata Elxsi is recognized as a premium engineering service provider worldwide and amongst the leaders in the automotive, media, broadcast, communications, and healthcare industries.
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