Tata Elxsi reported robust financial performance for the quarter ended December 31, 2025, with revenue from operations growing 3.9% quarter-on-quarter to ₹953.5 crores and 1.5% year-on-year. The company demonstrated strong operational excellence with EBITDA margin expanding by 220 basis points QoQ to reach 23.3%, reflecting improved utilisation and delivery efficiency.

Financial Performance Highlights

The company's financial metrics showed consistent improvement across key parameters during Q3 FY26:

Total income for the quarter reached ₹999.5 crores, up 3.4% QoQ, including other income of ₹46.0 crores. The company's earnings per share stood at ₹28.74 for Q3 FY26, representing a 15.7% increase from the previous quarter.

Segment and Vertical Performance

The transportation vertical emerged as the primary growth driver, contributing 56.6% of the Software Development & Services segment revenue and registering 7.3% growth in constant currency terms QoQ. The Media and Communications vertical, representing 31.1% of SDS revenue, declined 1.3% QoQ in constant currency, while Healthcare & Life Sciences (10.8% of SDS) saw a 4.3% decline QoQ.

The Software Development & Services segment maintained its dominance at 97.2% of total revenue, growing 3.5% QoQ in constant currency terms, while System Integration & Support contributed 2.8% with a 6.0% decline QoQ.

Geographic Distribution and Client Metrics

Europe remained the largest revenue contributor at 42.1% of total revenue, up from 38.7% in Q2 FY26, followed by Americas at 32.0%. The company's client concentration showed an increase with top 5 clients contributing 49.4% of revenue compared to 44.2% in the previous quarter, while top 10 clients accounted for 59.4% versus 54.7% in Q2 FY26.

Major Deal Wins and Strategic Developments

Tata Elxsi secured several significant multi-million dollar deals during Q3 FY26 across its key verticals:

Healthcare Sector:

• Selected by a Europe-headquartered MedTech multinational for regulatory workflow transformation using the company's RegAI framework
• Awarded contract by an American multinational healthcare leader for next-generation drug preparation system development

Transportation Sector:

• Won multi-million-dollar deal from US-based off-highway OEM for next-generation operator information and control system

Media and Telecommunications:

• Chosen by leading MEA-based media and publishing giant for digital-first platform development
• Selected as strategic partner by major European telecom operator for 3-year network transformation using NEURON platform

Strategic Partnerships and Recognition

The company strengthened its market position through key partnerships, including a Memorandum of Understanding with GSMA for operator network monetization through standardized APIs, collaboration with University of Illinois Urbana-Champaign and OSF HealthCare for rural healthcare transformation, and partnership with Nova Technologies for co-developing Kavach 4.0 railway safety system.

Tata Elxsi received notable recognition during the quarter, winning the Tata InnFuze Challenge 2025 alongside Tata Motors for 'Virtual Sensors' innovation, and securing first place at the Google Cloud Gen AI Hackathon for its TEFabriX-Powered Meta-Automation solution.

Operational Metrics

The company's headcount stood at 11,594 employees at the end of Q3 FY26, compared to 11,951 in Q2 FY26. Employee attrition increased marginally to 15.6% from 15.4% in the previous quarter. The onsite-offshore revenue mix remained stable with onsite contributing 26.9% and offshore 73.1% of total revenue.

Tata Elxsi delivered a robust performance in the third quarter of FY26, demonstrating healthy growth across key financial metrics and securing strategic wins across multiple verticals. The design-led technology services provider reported strong operational results for the quarter ended December 31, 2025.

Financial Performance Overview

The company's financial performance for Q3 FY26 showcased consistent growth momentum and improved profitability metrics:

*Note: PBT and PAT growth excludes one-time exceptional item due to new labour code

Business Segment Performance

The transportation vertical emerged as the primary growth driver during the quarter. The segment benefited from accelerated ramp-ups in software-defined vehicle deals that were secured earlier in the year. Additionally, the company experienced normalization of workstreams and programs with a strategic OEM client that had been impacted in the previous quarter.

Geographically, Europe and the United States led the growth trajectory, with broad-based expansion across key accounts and verticals. However, the Media and Communications and Healthcare and Life Sciences verticals faced headwinds due to seasonal furloughs and delayed deal awards at quarter-end.

Strategic Deal Wins and Partnerships

Tata Elxsi secured several significant contracts that underscore its design digital proposition:

Healthcare Sector Achievements

• Multi-million, multi-year deal with a European MedTech leader for Gen AI-powered regulatory workflow transformation
• Large contract for next-generation drug delivery system development for critical illness treatment
• Solutions delivering significant improvements in cycle time and quality

Transportation and Telecommunications

• New program with strategic US off-highway OEM for complex operator information and control system development
• Strategic partnership selection by major European telecom operator for 3-year network transformation journey
• Platform-led deal featuring NEURON, the company's award-winning orchestration and automation platform for 4G/5G networks

Operational Excellence and Margin Expansion

The company demonstrated strong operational performance with EBITDA margin expanding by 220 basis points quarter-on-quarter to reach 23.3%. This improvement was attributed to operational and delivery excellence, along with enhanced utilization rates. The margin expansion reflects the company's focus on efficiency and value-driven service delivery.

Technology Investments and Future Outlook

Tata Elxsi continues to invest strategically in artificial intelligence and generative AI applications tailored to innovation and product engineering contexts. These investments are being scaled across the organization and are increasingly reflected in deal wins and enhanced value propositions offered to customers across verticals.

According to CEO and Managing Director Manoj Raghavan, the company is entering the final quarter of the financial year with strong momentum, supported by strategic customer base shifts, new customer additions, large deal wins, and investments in future-forward technology areas including Gen AI.