Tata Elxsi Q1 Results: Profit Falls 6.5%, Misses Estimates
Revenue of the company fell 2.3% quarter-on-quarter to Rs 926 crore.
![<div class="paragraphs"><p>Tata Elxsi office. (Source: Company website)</p></div>](https://media.assettype.com/bloombergquint%2F2022-08%2F9a9a6b99-4f58-454d-a09b-de889801518c%2FVxRYMCdHiP7ehc29TVF9.jpg?rect=0%2C0%2C1200%2C675&auto=format%2Ccompress&w=200)
Tata Elxsi Ltd. reported a 6.5% decline in its net profit on a sequential basis for the first quarter of this financial year.
The engineering, research and development firm reported a bottom line of Rs 184 crore in the quarter-ended June as compared with Rs 197 crore during the previous quarter, according to its stock exchange notification. That compares with the Rs 198.2-crore analysts' estimate tracked by Bloomberg.
Revenue of the company fell 2.3% quarter-on-quarter to Rs 926 crore. Analysts tracked by Bloomberg had pegged the top line at Rs 922.5 crore. Revenue from software development, the highest contributor to the company's top line grew 2% sequentially to Rs 899.99 crore.
Operating income or earnings before interest and tax fell 3.6% on a quarterly basis to Rs 225 crore, while the EBIT margin contracted to 24.3% from 25.8% during the previous quarter. The analyst consensus estimates for EBIT and EBIT margin tracked by Bloomberg stood at Rs 235.2 crore and 25.5%, respectively.
The company has a healthy deal pipeline, continued growth in the transportation sector, and new customer acquisitions across various verticals for the second quarter, the company's Chief Executive Officer Manoj Raghavan said in a statement.
During the analysts' call, Raghavan said that the company is looking to train 25% of its talent pool in AI by December this year, as the company continues to invest in digital AI and Gen AI technologies. He further said that the company plans to stick to the guidance from the previous quarter.
He doesn't expect the wage hikes to have an impact on the margin. The company further said that the margin will be in the range of 28% to 29%.
The scrip closed 1.46% higher at Rs 7,119.45 apiece, as compared to a 0.45% decline in the NSE Nifty 50.