Tata Elxsi Q1 FY27 Results (NSE: TATAELXSI)
Signal: Growth reaccelerated
The read
Revenue growth at +14.5% YoY is healthy, but EBIT margin slid 264bps QoQ to 22.5%, reversing the previous quarter's high base; the improvement in system integration profitability YoY is a positive, though sequential margin collapse warrants watching.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,021.11 Cr | 14.46% | 2.75% |
| Net profit | ₹170.6 Cr | 18.20% | |
| EPS | ₹27.38 | ||
| EBIT margin | 22.54% |
P&L walk
Revenue grew 14.5% YoY, but EBIT margin fell 264bps QoQ as employee cost, materials, and other expenses all rose faster than revenue sequentially.
Segments
Software development & services remains the dominant driver with 97.2% of revenue and 99.0% of segment result; system integration & support services turned from a loss (-₹257.90 lakh) to a profit (₹310.88 lakh) YoY but its margin compressed sharply QoQ from 31.1% to 10.8%.
Key positives
- Revenue grew 14.5% YoY to ₹1,021.11 Cr, with system integration surging 46.8%.
- Net profit up 18.2% YoY at ₹170.60 Cr.
- Software development segment EBIT margin improved YoY from 29.1% to 29.8%.
- Near-zero debt (D/E 0.05) and finance cost dropped 40.4% YoY.
- Unmodified audit opinion with no qualifications.
Key concerns
- EBIT margin compressed 264bps QoQ as employee and other expenses outpaced revenue growth.
- System integration segment margin collapsed from 31.1% QoQ to 10.8%, raising questions about project mix.
- Other income fell 18.0% QoQ to ₹41.46 Cr, partly offsetting operating profit weakness.
- Effective tax rate jumped to 26.6% from 17.7% QoQ, amplifying PAT decline.
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