Tata Elxsi reports 2.5% drop in net profit in Q1
Bengaluru Bengaluru: Engineering services firm, Tata Elxsi reported a 2.5 per cent decline in its net profit to Rs 184.1 crore on a year-on-year basis for the first quarter ended June 2024. Revenue in the first quarter grew 9 per cent to Rs 926.5 crore as compared to Rs 850.3 crore a year ago. In constant currency terms, revenue grew 2.4 per cent compared to the previous quarter. The Bengaluru-headquartered firm’s profit was impacted by weak growth in its healthcare and life sciences segment, which saw a 4.3 per cent decline in growth on a sequential basis. Similarly, its media and communications vertical also saw a marginal growth of only 0.5 per cent on a sequential basis.
“We executed very well this quarter on operational excellence and fiscal discipline, despite an exceptional one-time expense in the quarter and the impact of an increase in the effective tax rate along with a change in SEZ benefits for one of our facilities. Our investments in building a talent pool over the last few quarters have provided us with strong levers to drive topline growth and manage our bottom line. With our differentiated offerings, offshore deliveries and operational excellence, we are confident of returning to our preferred margin band this year,” said Manoj Raghavan, CEO and Managing Director, Tata Elxsi.
“Our transportation business recorded robust growth of 5.3 per cent quarter-on-quarter and 20.3 per cent year-on-year in constant currency, and now accounts for over 50 per cent of our software development and services business. We believe we are well positioned to capitalise on growth opportunities in the coming quarters,” he said. Its operating margin during the first quarter stood at 24.3 per cent, down 1.5 percentage points from the previous quarter. Its margin was 27.1 per cent a year ago.
