Global design and technology services provider Tata Elxsi reported largely flat net profit for the September quarter, even as revenue and operating profit grew sequentially, supported by broad-based growth across its key business verticals.
Net profit stood at ₹170.3 crore, marginally lower than the ₹170.6 crore reported in the June quarter. Revenue from operations rose 3.4% quarter-on-quarter to ₹1,055.7 crore from ₹1,021.1 crore. In constant currency terms, revenue grew 2.3% sequentially.
Earnings before interest and tax (EBIT) increased 7.2% quarter-on-quarter to ₹207.7 crore from ₹193.7 crore, while the EBIT margin expanded to 19.68% from 18.97% in the previous quarter.
Growth across transportation, media and healthcare
The company recorded sequential growth across all three key verticals in the September quarter. Transportation revenue grew 2% in constant currency terms, while media and communications revenue increased 3.4%. Healthcare and life sciences revenue rose 3.5% on the same basis.
This growth was broad-based across all three key verticalsMANOJ RAGHAVAN, MD AND CEO, TATA ELXSI
The transportation business, which accounts for more than 55% of the company’s software development services (SDS) segment, secured a multi-year deal from a leading automotive original equipment manufacturer for a cloud-based telematics and connected vehicle ecosystem.
Tata Elxsi also announced a strategic collaboration with Sarla Aviation to support the development of Shunya, an electric vertical take-off and landing (eVTOL) aircraft.
Its media and communications vertical, which contributed 33.6% of the SDS segment, benefited from deal ramp-ups and new wins. The company secured an artificial intelligence deal from a global technology leader to develop a generative AI-based virtual assistant focused on multilingual intelligence and global-scale digital experiences.
The healthcare business won a product engineering mandate from a global renal care company to redesign a next-generation home dialysis system. The work spans user experience, mechanical engineering, electronics, embedded systems and regulatory compliance.
Operating efficiencies support margins
Raghavan said the company’s focus on operational efficiencies had helped improve profitability despite salary revisions across its workforce during the quarter.
Our focus on operational efficiencies across the organization has resulted in improved EBITDA margins, with EBITDA expanding 70 bps QoQ, despite salary revisions implemented across the entire employee base in the quarterMANOJ RAGHAVAN, MD AND CEO, TATA ELXSI
Shares of Tata Elxsi closed 5.21% higher at ₹3,426.70 on the NSE on Tuesday, ahead of the earnings announcement.
Tata Elxsi provides design and technology services to clients across automotive, media and communications, and healthcare, helping develop products, software platforms and digital experiences.