Tata Elxsi shares fall over 4% after weak Q4. Motilal Oswal, HDFC Securities cut target price

Shares of Tata Elxsi tumbled 4% to Rs 4,454 on the BSE on Wednesday after it reported a 28% increase in net profit for the January to March quarter of FY26 at Rs 220 crore, compared with Rs 172 crore in the same period last year.

Revenue from operations for Q4FY26 stood at Rs 994 crore, up 9% from Rs 908 crore a year ago. The company’s board has recommended a dividend of Rs 75 per equity share for the financial year ended March 31, 2026, subject to shareholder approval at the upcoming Annual General Meeting.

EBITDA for the quarter came in at Rs 244.6 crore, reflecting a 10% quarter-on-quarter growth, with margins at 24.6%. Profit before tax was reported at Rs 268 crore, rising 11% sequentially and 21% year-on-year, while the PBT margin stood at 25.6%.

On a sequential basis, net profit more than doubled, rising 102% from Rs 109 crore in Q3FY26. Revenue also increased by over 4% from Rs 953 crore in the October to December quarter.

Tata Elxsi share price: Should buy, sell, or hold?

Motilal Oswal has maintained a ‘Sell’ rating on Tata Elxsi and cut its target price to Rs 3,350, implying a downside of about 28%. The brokerage said that while Q4FY26 delivered modest growth, the company’s outlook has turned more conservative.

It highlighted that FY27 growth is now expected to be in the high single digits, impacted by delays in deal closures and longer decision cycles. Future growth is likely to depend on the ramp-up of existing deals and continued traction in the transportation segment, while recovery in media and healthcare is expected to be gradual. The brokerage expects dollar revenue growth to remain moderate at around 7% CAGR over FY26 to FY28.

HDFC Securities has maintained an ‘Add’ rating on Tata Elxsi, while revising its target price downward to Rs 4,825. The brokerage noted that revenue growth came in at 0.9% quarter-on-quarter in constant currency terms, slightly below expectations. However, EBITDA margin improved by around 130 basis points sequentially to 24.6%.

Segment-wise, healthcare remained weak, while the media showed signs of recovery and the transportation segment stayed stable. The demand environment continues to be mixed, with delays in decision-making attributed to geopolitical uncertainties. The stock is currently valued at around 30 times its estimated March 2028 earnings.

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