Tata Elxsi Reports Strong Q3 FY26 Performance with Revenue Growth and Margin Expansion

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:

Metric	Q3 FY26 Performance	Growth (QoQ)
Revenue from Operations	₹953.5 crores	+3.9%
EBITDA	₹222.2 crores	-
EBITDA Margin	23.3%	+220 bps
Profit Before Tax	₹242.0 crores	+12.7%
Profit After Tax	₹179.1 crores	+15.7%

*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.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.75%	+8.01%	+15.16%	-4.50%	-2.50%	+177.50%

Tata Elxsi has delivered strong financial performance in Q3, demonstrating significant improvement in both earnings and operational efficiency. The company's quarterly results showcase enhanced profitability metrics and improved margin performance.

Financial Performance Overview

The company's Q3 financial metrics reflect substantial growth across key performance indicators:

Metric	Q3 Results	Previous Quarter	Growth
EBIT	₹1.99 billion	₹1.70 billion	+17.06%
EBIT Margin	20.92%	18.5%	+242 bps

Operational Efficiency Gains

Tata Elxsi's EBIT margin expansion to 20.92% from 18.5% in the previous quarter represents a significant improvement of 242 basis points. This margin enhancement indicates the company's ability to optimize operational costs while maintaining revenue growth momentum. The improved EBIT margin reflects better operational leverage and enhanced cost management strategies.

Earnings Growth Analysis

The company achieved EBIT of ₹1.99 billion in Q3, marking a notable increase from ₹1.70 billion in the previous quarter. This quarter-on-quarter growth of 17.06% demonstrates strong business momentum and effective execution of operational strategies. The consistent improvement in earnings performance highlights the company's robust business fundamentals and market positioning.