Tata Elxsi share price

📉 What’s Driving the Drop?

• Q1 Profit Miss: Tata Elxsi reported a 22% YoY drop in Q1FY26 consolidated PAT to ₹144 cr, down from ₹184 cr a year ago Reuters+13Business Today+13Tata Elxsi+13The Machine Maker+7The Economic Times+7The Economic Times+7.
• Revenues Dip: Q1 revenue slid 3.7% YoY to ₹892 cr, missing analyst estimates and pointing to slowed client R&D budgets The Economic Times+2Reuters+2Moneycontrol+2.
• Market Reaction: Shares plunged ~7% initially, trading near ₹5,900–6,000, as investors reassessed outlook Rediff+3Moneycontrol+3TradingView+3.

🔍 Key Metrics & Financials

• Valuation: P/E ~49×, P/B ~13× — steep valuations reflect leadership in niche engineering design Rediff+3Business Today+3The Economic Times+3.
• Profitability: Strong RoE (~29%) and RoCE (~36%) indicate high operational efficiency NSE India+4Screener+4Groww+4.
• Margins: Q1 EBITDA margin was ~20.9%, with PBT margin ~21.1% The Economic Times+3Tata Elxsi+3Yahoo Finance UK+3.
• Auto Exposure: The automobile segment (~50% of revenue) faced headwinds due to global tariff uncertainty and R&D delays Business Standard+10Reuters+10Reuters+10.

📈 Outlook: Key Catalysts & Risks

Catalysts

• Deal pipeline: Large order wins in automotive (e.g. Mercedes, Suzuki), media, and healthcare sectors Tata Elxsi+1Moneycontrol+1.
• Sector recovery: Auto industry is expected to regain momentum in Q2–Q3, lifting R&D demand .

Risks

• Margin pressure from paused client projects and trade disruptions Groww+2The Machine Maker+2Reuters+2.
• High valuation means earnings disappointments can trigger sharp correction.

✅ Summary

Tata Elxsi remains a premium mid-cap with strong franchise and profitability, though current earnings reflect weak auto demand and macro uncertainty. The dip to ₹5,900–6,000 levels could offer a value entry for long-term investors—provided auto R&D rebounds and margin stability holds.

❓ FAQs — Tata Elxsi Share Price

Q1. Why did Tata Elxsi shares fall ~7%?
The drop follows a 22% YoY profit decline and revenue miss in Q1FY26, along with auto sector slowdown Moneycontrol+13Business Today+13Screener+13.

Q2. Are valuations justified at ~49× PE?
Valuation is rich, but backed by low leverage, high RoE/ROCE, and niche leadership. Still, earnings recovery is needed to sustain multiples .

Q3. What key support/resistance levels to watch?
Short-term support lies near ₹5,800–5,900, while resistance around ₹6,400–6,500 aligns with 50‑day moving averages (technical analysis context).

Q4. Can Tata Elxsi return to growth soon?
The company expects gradual auto and R&D project recovery by Q2–Q3, which could support a rebound The Economic Times+15Reuters+15Business Standard+15.

⚠️ Disclaimer

This is for informational purposes only and not financial advice. Consult a SEBI-registered advisor before making investment decisions.