Tata Elxsi: Ouch, margins hurt

Research evidence excerpt

Tata Elxsi: Ouch, margins hurt

J P M O R G A N Asia Pacific Equity Research

15 July 2026

Tata Elxsi Neutral

TELX.NS, TELX IN

Ouch, margins hurt Price (14 Jul 26):Rs3,697.30

▼Price Target (Jun-27):Rs3,500.00

Prior (Dec-26):Rs3,600.00

1Q print was mixed with a beat on revenues but margins missed sharply. Revenues

grew 1.3% CC QQ led by Media/Telecom while there were drags in Auto and IT Services, EMS, Telecom, and

Internet ResearchHealthcare. TELX continues to aim for HSD revenue growth in FY27 (JPMe at

6.4%) however this hinges on Healthcare rebounding where there is still Bhavik Mehta, CFA AC

uncertainty. Management expects Media/Telecom growth to continue on the back (91-22) 6157-3871

bhavik.mehta@jpmchase.com

of deal wins and rampups. In Autos, it acknowledged headwinds in EU region J.P. Morgan India Private Limited, J.P. Morgan

(>40% of Auto business). The shocker in the result however was margins that Tower, Santacruz(E), Mumbai - 400098, SEBI

contracted a sharp 330bps QQ due to a combination of headwinds from large deal Registration: INH000001873, (91-22) 6157-3000.

Technology, IT Services, Telecoms &transition and rampup costs, onsite delivery investments (subcons), talent

Internet

investment, customer related costs and provisions, and one time annual costs.

Some of these costs will go away over next 1-2 quarters while some will take a bit Ankur Rudra, CFA

longer. We cut earnings by 1-13% mainly driven by 7-330bps margin cuts over (65) 6801-3237

ankur.rudra@jpmorgan.com

FY27-29E. Remain N with new PT of Rs3500 (from Rs3600). J.P. Morgan Securities Singapore Private Limited

• 1Q print mixed. 1Q print was mixed with a beat on revenues but margins

missed sharply. Revenues grew 1.3% CC QQ and came in 30bps ahead of cons/ Key Changes (FYE Mar)

JPMe.