Tata Elxsi Limited (TATAELXSI) AI Stock Analysis

Tata Elxsi Limited

(NSE:TATAELXSI)

Select Model

Rating:73Outperform

Price Target:INR 3,820.00▲(0.79% Upside)

Action:reiterated

Date:10/14/26

The score is driven primarily by strong financial quality (low leverage and reliable cash generation) but moderated by slowing growth and recent margin/earnings pressure. Technical signals are mixed with negative MACD and the stock below key medium/long-term averages, while valuation is somewhat high versus earnings despite a decent dividend. The latest earnings call adds support via improving margins and a stronger H2 outlook, but Europe-related softness and execution/ramp-up risks remain.

Positive Factors

Conservative balance sheetVery low leverage gives Tata Elxsi financial flexibility to invest in capabilities, absorb demand volatility, and sustain operations without heavy financing pressure. Healthy returns on equity also indicate that the company is using its capital productively, despite some recent moderation.

Negative Factors

Slowing growth and margin pressureThe sharp deceleration in revenue growth and recent margin compression weaken near-term earnings momentum and make operating leverage more important. If slower demand persists, Tata Elxsi may have less room to offset wage costs and maintain its historically strong profitability.

Tata Elxsi Limited (TATAELXSI) vs. iShares MSCI India ETF (INDA)

Market Cap: INR 236.12B
Dividend Yield: 1.98%
Average Volume (3M): 25.01K
Price to Earnings (P/E): 35.2
Beta (1Y): 1.43
Revenue Growth: 10.01%
EPS Growth: -0.08%
Country: India
Employees: 11,984
Sector: General
Sector Strength: 55
Industry: Information Technology Services

Tata Elxsi Limited Business Overview & Revenue Model

Company Description

Established in 1989 and headquartered in Bengaluru, India, Tata Elxsi Limited is a global technology and design services company. It delivers comprehensive solutions spanning product design and engineering, systems integration, and ongoing support ac...

How the Company Makes Money

Tata Elxsi primarily makes money by providing outsourced engineering and digital technology services to enterprise clients, charging for project work and ongoing services engagements. Its revenue model is largely services-led and typically monetized...

Tata Elxsi Limited Earnings Call Summary

Earnings Call Date:Oct 12, 2026(Q2-2027)|% Change Since:16.44%|Next Earnings Date:Jan 12, 2027

Earnings Call SentimentPositive

The call was broadly positive, supported by 2.3% constant-currency revenue growth, strong EBITDA growth and margin expansion, growth across all three major verticals, multiple strategic AI, automotive, aerospace, and healthcare wins, and confidence that H2 FY2027 will be better than H1 on a year-on-year basis. However, management highlighted persistent softness and delayed deal decisions in Europe, potential Q3 furloughs, below-peak utilization, specialized-talent retention needs, and the early-stage nature of several new growth vectors.

Positive Updates

Revenue Growth and Strong EBITDA Performance

Q2 FY2027 operating revenue was INR 1,055.7 crores, growing 2.3% in constant currency. EBITDA was INR 231.4 crores, up 7.1% quarter-on-quarter and 19.7% year-on-year.

Negative Updates

Europe Remains Soft and Uncertain

Europe was soft, particularly because of its predominance of automotive revenue. Large deals remain in final shortlists, but decision-making by European OEMs has been delayed and management could not provide a timeline for closure.

Company Guidance

The company does not provide formal guidance, stating, “As a policy, and in general, we do not provide guidance at all”; however, management said H2 is expected to be better than H1, with 2H revenues “higher even on a YoY basis,” while Europe remains “soft” and “uncertain,” and it is “pretty confident” in continued growth in the U.S., India and Asia, with Media & Communications and Healthcare & Life Sciences expected to grow. Q3 is “typically a short quarter with fewer working days,” with possible furloughs. Management expects operational leverage to continue, a “slightly upward margin trajectory” for the rest of the year, and “gradual improvement” in margins over the next “two to three quarters,” while utilization is “about 78%,” with “some room to grow” toward a historical peak of “around 81%, 82%”; new deals typically take “a couple of quarters, three quarters and so on” to reach full ramp-up, and aerospace and defense deals take “at least two to three quarters.”

Tata Elxsi Limited Financial Statement Overview

Summary

Strong overall fundamentals supported by a conservative balance sheet (very low leverage, healthy ROE) and high-quality cash flows (FCF closely tracks earnings). The main offset is slowing operating momentum: revenue growth has decelerated sharply and margins/earnings have trended down recently.

Income Statement

72Positive

Balance Sheet

88Very Positive

Cash Flow

84Very Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	40.24B	37.57B	37.29B	35.52B	31.45B	24.71B
Gross Profit	13.38B	14.50B	15.60B	15.47B	13.98B	11.30B
EBITDA	9.15B	8.69B	11.52B	11.68B	10.35B	8.10B
Net Income	6.70B	6.28B	7.85B	7.92B	7.55B	5.50B
Balance Sheet
Total Assets	38.49B	39.63B	35.86B	31.87B	27.64B	21.69B
Cash, Cash Equivalents and Short-Term Investments	16.15B	16.69B	15.89B	13.80B	11.81B	9.56B
Total Debt	1.43B	1.62B	1.92B	2.24B	1.82B	1.39B
Total Liabilities	9.37B	9.21B	7.26B	6.81B	6.78B	5.68B
Stockholders Equity	29.13B	30.41B	28.61B	25.06B	20.86B	16.01B
Cash Flow
Free Cash Flow	0	7.77B	7.96B	6.18B	4.23B	4.12B
Operating Cash Flow	0	7.88B	8.12B	7.01B	4.87B	4.83B
Investing Cash Flow	0	-1.98B	-3.08B	-2.70B	-2.02B	-1.08B
Financing Cash Flow	0	-5.33B	-4.99B	-4.28B	-3.03B	-3.26B

Tata Elxsi Limited Technical Analysis

Technical Analysis SentimentPositive

Last Price3790.00

Price Trends

50DMA3476.12Positive

100DMA3625.29Positive

200DMA4082.38Negative

Market Momentum

MACD120.37Negative

RSI65.02Neutral

STOCH51.73Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TATAELXSI, the sentiment is Positive. The current price of 3790.00 is above the 20-day moving average (MA) of 3514.56, above the 50-day MA of 3476.12, and below the 200-day MA of 4082.38, indicating a neutral trend. The MACD of 120.37 indicates Negative momentum. The RSI at 65.02 is Neutral, neither overbought nor oversold. The STOCH value of 51.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:TATAELXSI.

Tata Elxsi Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

IN:TATAELXSI against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IN:NEWGEN	74Outperform	INR 63.05B	19.58	―	1.36%	6.49%	-3.73%
IN:TATAELXSI	73Outperform	INR 236.14B	35.23	―	1.98%	10.01%	-0.08%
IN:MAPMYINDIA	64Neutral	INR 43.58B	31.64	―	0.44%	1.83%	-12.91%
IN:NUCLEUS	63Neutral	INR 16.94B	16.30	―	1.95%	1.66%	-37.05%
IN:INTELLECT	60Neutral	INR 70.88B	19.90	―	0.79%	16.99%	-12.47%
IN:RAMCOSYS	57Neutral	INR 19.08B	64.91	―	―	10.73%	236.66%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

IN:TATAELXSI and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
IN:TATAELXSI	Tata Elxsi Limited	3790.00	-1551.49	-29.05%
IN:INTELLECT	Intellect Design Arena Ltd	504.60	-683.25	-57.52%
IN:MAPMYINDIA	C.E. Info Systems Ltd.	795.00	-1007.67	-55.90%
IN:NEWGEN	Newgen Software Technologies Limited	442.45	-541.23	-55.02%
IN:NUCLEUS	Nucleus Software Exports Limited	643.45	-375.81	-36.87%
IN:RAMCOSYS	Ramco Systems Limited	507.10	-115.65	-18.57%

Tata Elxsi Limited Corporate Events

Tata Elxsi Publishes Audio Recording of Earnings Conference Call

Oct 13, 2026

Tata Elxsi Limited has notified stock exchanges that it has made available an audio recording of its conference call discussing the audited financial results for the quarter and half-year ended September 30, 2026. The company has also posted this rec...

Tata Elxsi to Join J.P. Morgan India Conference for Investor Meetings

Sep 17, 2026

Tata Elxsi Limited, a design and technology services provider in engineering R&D and digital solutions across sectors such as automotive, communications and healthcare, is listed on BSE and NSE and regularly engages with institutional investors t...

Tata Elxsi and SCTIMST Form Strategic MedTech Partnership to Drive Healthcare Innovation

Jul 27, 2026

Sree Chitra Tirunal Institute for Medical Sciences and Technology (SCTIMST), an Institution of National Importance under India’s Department of Science and Technology, has signed an MoU with Tata Elxsi to jointly develop next-generation healthca...

Tata Elxsi Shares Q1 FY27 Results Call Recording With Markets

Jul 14, 2026

Tata Elxsi Limited has notified the stock exchanges that it has released the audio recording of its conference call discussing the audited financial results for the quarter ended June 30, 2026. The recording link has been shared with the exchanges an...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 14, 2026

Tata Elxsi Limited AI Stock Analysis