Tata Elxsi: Tata Elxsi posts Q4 profit surge on strong deal pipeline

BENGALURU: Tata Group‘s software and consulting arm Tata Elxsi Ltd on Thursday reported a 26% surge in fourth-quarter profit, boosted by healthy deals across key segments.
Net profit rose to 2.02 billion rupees ($24.70 million) for the three months ended March 31, from 1.60 billion rupees a year earlier, according to an exchange filing.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) margins contracted to 29.8% from 32.5% a year earlier, the Bengaluru-based company said.
It reduced contractor headcount by hiring new permanent employees, resulting in lower core profit margin.
Tata Elxsi managed to book multi-year deals across its key segments and maintain a healthy order pipeline despite macroeconomic uncertainties. Ease in supply chain disruptions and higher utilization also supported the company’s growth momentum.
Revenue from operations climbed 22.9% to 8.38 billion rupees ($102.47 million), after it crossed the $100 million mark for the first time in the previous quarter, supported by deals inflow in the industrial design and visualisation sector.
While the company caters to multiple industries from healthcare, media & communications to automotive, business from the transportation sector particularly witnessed a surge of 23.2% on the back of rising popularity of electric and autonomous vehicles.
Some of the major deals in the reported quarter include a long-term agreement with Alps Alpine to establish a Global Engineering Centre (GEC) in Thiruvananthapuram, India and a deal with a global telecom products company for 5G broadband software and solution development.
The company’s board also declared a final dividend of 60.60 rupees per share.
Shares of Tata Elxsi had fallen 5.2% during the March-quarter. However, it managed to reverse losses and has surged 19.5% since then.

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