Tata Elxsi share price: Shares of Tata Elxsi, a global design and technology services company for automotive, media, communications and healthcare, were trading with losses in the afternoon trade on Wednesday, January 14.
The company announced its financial results for the December 2025 quarter (Q3 FY26) on Tuesday.
The Tata Group company posted a 29.7% quarter-on-quarter (QoQ) decline in its net profit to ₹108.9 crore.
In the quarter-ago period, the design and technology services company had clocked a profit of ₹154.8 crore, it said in a regulatory filing.
In the December quarter, its bottom line was impacted by a one-time exceptional item on account of the implementation of new labour codes. Furthermore, its profit after tax (PAT) for the reporting quarter, barring the one-time exception expense, stood at ₹179.1 crore.
Its revenue from operations advanced 3.9% sequentially to ₹953.5 crore for the December quarter of FY26, compared to ₹918.1 crore in the second quarter of the current fiscal year (Q2FY26).
At an operational level, its EBITDA (earnings before interest, tax, depreciation and amortisation), also known as operating profit, stood at ₹222.2 crore in the December quarter, marking a 14.95% sequential jump from ₹193.3 crore in the September quarter.
Furthermore, its EBITDA margin expanded to 23.3% during the reporting period, as against 21.1% in Q2FY26.
What analysts say post Q3 FY26 earnings
Analysts opine that the earnings for the quarter under review were steady; however, the stock’s valuations could be a concern.
JP Morgan, in its results review report, said the company’s 3Q26 performance beat expectations across revenues, margins, and adjusted earnings per share (EPS).
According to the global investment firm, revenues grew 3.2% quarter-on-quarter in constant currency, driven largely by the automotive segment, which posted 7.3% growth. The strong showing was attributed to bunched-up deal ramp-ups, including Mercedes, as well as Jaguar Land Rover (JLR) returning to growth.
JP Morgan, as per news reports, noted that the outlook for the auto segment remains positive, with steady growth expected going forward. This will be supported by scope expansion in large deals such as Suzuki and continued growth in JLR over the next one to two quarters.
The investment firm added that the media & Telecom and healthcare verticals are expected to return to growth in 4Q, driven by deal ramp-ups following a furlough-led decline in the previous quarter, as guided by the company.
Margin performance stood out, with 240 basis points of quarter-on-quarter expansion, taking margins back above the 20% mark after three quarters. This was primarily aided by higher utilisation, which JP Morgan described as the biggest lever for margin improvement. Current utilisation stands at 75%, with the potential to rise to 80%.
The company has reiterated its target of achieving 25% margins by 4QFY27, while JP Morgan’s estimate stands at 24%.
However, JP Morgan highlighted its premium valuation of 45x, compared with peers KPIT Technologies and Tata Technologies, which trade at around 35x.
Morgan Stanley
Morgan Stanley, as per news reports, also noted that the company’s growth trends were better than expectations. Margins surprised positively due to higher utilisation at 75% in 3QFY26, which was earlier than expected in 4QFY26.
Morgan Stanley also flagged rich valuations and an unfavourable risk-reward without material and sustainable growth recovery.