India's Tata Elxsi misses Q3 revenue view on weak demand in media & communications wing

Tata Technologies

09/01/2025 12:08

Jan 9 (Reuters) - Indian engineering and technology services firm Tata Elxsi  TTEX.NS  reported a smaller-than-expected
third-quarter revenue on Thursday, hurt by sluggish demand in its media and communications division.
    The company's revenue from operations rose 2.7% to 9.39 billion rupees ($109.40 million) for the quarter ended Dec. 31, below analysts'
estimate of 9.69 billion rupees, according to data compiled by LSEG.
    Its net profit fell 3.6% to 1.99 billion rupees, but was in line with analysts' expectations of 2 billion rupees.
    Revenue from the company's media and communications unit fell 5.5% year-on-year. The division accounts for about 32.4% of revenue from
its software development and services segment, which, in turn, contributes more than 97% to total revenue.    
    Shares of the company closed 0.5% lower ahead of results on Thursday. 
    
    KEY CONTEXT       
    Engineering, research and design (ER&D) services - which include technology support to industries such as transportation and
communications - contribute a sixth of the revenue to India's $254 billion technology sector.    
    Tata Elxsi provides ER&D services for telecom and media players in areas such as advertising technology services and Wi-Fi testing
services.
    The company was negatively impacted in the quarter by a continuing slowdown in the communications business and headwinds in the
automotive segment, analysts said.
    L&T Technology Services will report results on Jan. 15.

   PEER COMPARISON    
                                        Valuation (next   Estimates (next 12 months)   Analysts' sentiment                       
                                          12 months)                                                                             
                            RIC        PE       EV/EBITD  Revenue         profit       Mean       # of        Stock to price     Div yield
                                                A         growth(%)       growth(%)    rating *   analysts    target **          (%)
 Tata Elxsi Ltd              TTEX.NS     42.79     30.29      13.76          12.78     SELL               13        0.97               1.08
 L&T Technology Services     LTEH.NS     33.42     21.45      12.75          13.97     SELL               27        0.99               1.05
 Ltd                                                                                                                             
 KPIT Technologies Ltd       KPIE.NS     44.04     27.07      17.17          20.87     BUY                15        0.85               0.46
 Tata Technologies Ltd       TATE.NS     45.66     31.29      11.59          16.05     HOLD               10        0.98               0.96
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
   OCT-DEC STOCK PERFORMANCE
  



($1 = 85.8350 Indian rupees)

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 (Reporting by Aleef Jahan; Editing by Janane Venkatraman)
 ((aleefjahan.cs@thomsonreuters.com))