January 24, 2024

Tata Elxsi delivers healthy growth in Q3 FY’24, with revenue from operations growing at 3.7% QoQ, and EBITDA margin at 29.5%

Continues to execute strongly on the Design Digital proposition

Bangalore, January 23, 2024: Tata Elxsi (BSE: 500408; NSE: TATAELXSI), amongst the world’s leading providers of design led technology services, announced its third quarter results for the period ending December 31, 2023.

For the quarter ending December 31, 2023, company reported Rs. 914.2 Cr of operating revenue, a growth of 3.7% QoQ.

Highlights of the Quarter Ended December 31, 2023:

  • Revenues from operations at Rs. 914.2 Cr + 3.7% QoQ + 11.8% YoY
  • Operating revenue growth +3.0% QoQ and +9.4% YoY on a constant currency basis
  • Operating Margin at 29.5%; Net Margin (PBT) at 28.9%
  • Profit Before Tax (PBT) at Rs. 274.1 Cr +14.2% YoY
  • Profit After Tax (PAT) at Rs. 206.4 Cr +3.2% QoQ +6.0% YoY
  • Earning Per Share (EPS) at Rs. 33.15 +3.2% QoQ +6.0% YoY

Business Highlights:

  • Transportation growth is at 2.7% QoQ and 15.6% YoY, aided by deal wins and the ramp-up of Software Defined Vehicle (SDV) engagements.
  • Healthcare growth is at 4.6% QoQ, 13% YoY, driven by new product engineering and regulatory services.
  • Media and Communications grew 0.6% QoQ and 3.4% YoY, performing creditably in an unfavourable environment for the entire media, telecom, and technology industries.
  • Industrial design revenue grew strongly at 12.3% QoQ, leading with Design Digital.
  • System integration services grew 14.7% QoQ, aided by some key deal wins and managed services.

Mr. Manoj Raghavan, CEO and Managing Director, Tata Elxsi, commenting on the company’s performance in the third quarter of FY24, said:

“We are happy to report a healthy performance in the third quarter with top-line growth of 3.7% QoQ and 11.8% YoY in a challenging and weak quarter for the industry.

Our Healthcare & Lifesciences business executed strongly to report a growth of 4.6% QoQ and 13% YoY. This was backed by large deals in regulatory and new product engineering services.

Our transportation business witnessed steady growth of 2.7% QoQ in a short quarter. While we had some delays in planned ramp-ups and deal closures due to the short quarter and holidays, we are well positioned to capture growth opportunities in the continued transformation of the automotive industry and software defined vehicles.

Our Media & Communication business has done well in a deteriorated business environment for the media, telecom and technology industry, growing 0.6% QoQ and 3.4% YoY. We are staying close to our customers and building on both growth and efficiency offerings for customers in this industry.

Our Design-Digital strategy is continuing to drive differentiation and growth, with our Design business growing strongly at 12.3%. Our design teams have executed some landmark projects that span user research, design and implementation to pave the way for our customers to transform the consumer experience across industries. This also paves the path for capturing the downstream value of technology implementation as well as managed services for our systems integration business.

I am delighted with the recognition of our Design Digital capabilities with the German Design Award 2024 for excellence in design with the Gen 3 HMI. This award for the next generation automotive HMI design that we won along with Tata Motors, truly showcases the power of design when aligned seamlessly with technology to elevate the driving experience for future cars and electric mobility.

While we have continued to invest strongly in talent addition, with over 350 Elxsians in this quarter and a net of 1,357 Elxsians over the past nine months, we have done well to maintain our EBITDA well over the 29% band. This underlines our strong focus on delivery and operational excellence, and our confidence in the future and long-term demand for our differentiated offerings. Our employee engagement and talent retention strategies have contributed to attrition further improving to 12.9%.

As we step into the last quarter of this financial year, the confidence of our customers in our differentiated Design Digital proposition and delivery excellence, and a strong deal pipeline provide us the foundation for sustained growth.”

Related links