Tata Elxsi Q2 FY27 Results Analysis: Revenue Jumps 15% to Record, EBITDA Margin Recovers 77 bps (TATAELXSI)
Tata Elxsi Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 1,055.66 Cr (+14.98% YoY) and PAT growth of +10.00% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 13, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 1,055.66 Cr (+14.98% YoY) |
| PAT (Q2) | Rs. 170.30 Cr (+10.00% YoY) |
| EBITDA margin | 21.92% (+86 bps YoY) |
| EPS (Q2) | Rs. 27.34 (+10.02% YoY) |
| Market cap | Rs. 21,363.43 Cr |
| CMP | Rs. 3,426.70 |
Quarter Snapshot
Tata Elxsi delivered a record revenue quarter of Rs.1,055.66 Cr, up 14.98% YoY, with H1 growth of 14.73% tracking well ahead of management's high-single-digit FY27 guidance. EBITDA margin recovered 77 bps QoQ to 21.92% as Q1 one-off costs rolled off, though the wage hike capped the improvement below the guided 100-200 bps range. The key watch items are the 28.77% effective tax rate that flattened PAT QoQ, unallocable corporate expenditure up 49% YoY, and the steep 435 bps gap to the ~27% PBT margin exit target for Q4 FY27.
Key Investment Insights
Key Positives
- Revenue from operations reached a record Rs.1,055.66 Cr, up 14.98% YoY and 3.38% QoQ
- H1 FY27 revenue grew 14.73% YoY, tracking ahead of management's FY27 high-single-digit growth guidance
- EBITDA margin expanded 77 bps QoQ to 21.92% and 86 bps YoY, with EBITDA up 19.70% YoY
- SDS segment (97.4% of revenue) EBIT margin rose 73 bps QoQ to 30.49%, the highest since Q2FY26
- CFO/PAT improved to 1.10× in H1FY27 from 0.89× in H1FY26; free cash flow was Rs.355.85 Cr on capex of Rs.18 Cr
- Q1 one-off costs partially rolled off, with other expenses ratio down 81 bps QoQ to 12.38%
- PAT grew 10.00% YoY to Rs.170.30 Cr with no exceptional items in the quarter
Risk Factors
- PAT was flat QoQ (−0.18%) as the effective tax rate rose to 28.77% from 26.61% in Q1, absorbing Rs.7.19 Cr of incremental PAT
- Unallocable expenditure rose 49% YoY to Rs.76.69 Cr, absorbing 64% of the incremental segment profit
- PBT margin of 22.65% is below the ~23% threshold, leaving a 435 bps gap to the ~27% Q4 FY27 exit target requiring ~218 bps per quarter
- EBITDA margin QoQ improvement of 77 bps came in below the guided 100-200 bps range as the wage hike absorbed part of the one-off cost roll-off
- Employee cost ratio rose 115 bps QoQ to 58.74% due to the company-wide wage hike
- Other income declined 28.58% YoY to Rs.34.91 Cr
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.