Tata Elxsi Shares Plummet 8% Following Disappointing Q3 Results.

Tata Elxsi shares nosedived by nearly 8% on January 10, 2025, as the company's Q3 FY25 financial results fell short of market expectations. Net profit declined by 3.5% year-on-year (YoY) to ₹199 crore, while revenues inched up 3% YoY to ₹939.17 crore. The decline in profitability and limited growth visibility weighed on investor sentiment, leading to a sharp drop in share price.

Key Financial Highlights

1. Net Profit: Declined 3.5% YoY to ₹199 crore from ₹206.43 crore.
2. Revenue: Increased by 3% YoY to ₹939.17 crore, compared to ₹914.23 crore in Q3 FY24.
3. Expenses: Total expenses rose 7% YoY to ₹723 crore, attributed to higher employee and material costs.

The stock touched a low of ₹5,935.05 during the day, reflecting investor concerns about the company's performance amidst rising costs and a challenging macroeconomic environment.

CEO's Commentary

CEO and Managing Director of Tata Elxsi, Manoj Raghavan, emphasized the company's strategic focus on high-growth markets, particularly India, Japan, and emerging regions.

"We continue to see positive outcomes of our strategic business focus on Japan, emerging markets and capitalising on the India opportunity. During the quarter, our revenue from India has grown by 21.9 per cent YoY, while Japan and emerging markets grew at 66.8 per cent YoY. This will serve us well over the next few quarters even as we navigate geopolitical uncertainty, currency volatility and industry specific challenges in Europe and US," he noted.

Segmental Performance

• Development and Services: Revenue increased by 3.3% YoY.
• System Integration and Support Services: Revenue declined by 18.2% YoY.

Future Outlook

Tata Elxsi operates in the automotive, broadcast, communications, and healthcare sectors. The company's ability to navigate market headwinds while leveraging opportunities in India and Japan will be crucial in the coming quarters. However, challenges in Europe and the U.S. may continue to weigh on performance.