InvestorQ : What explains the sharp profit growth of Tata Elxsi for September 2022 quarter?
vaishnavi mhatre made post

What explains the sharp profit growth of Tata Elxsi for September 2022 quarter?

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vidhya Laxmi answered.
1 month ago
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For the second quarter ended September 2022, Tata Elxsi reported 30.8% higher sales revenues at Rs781.84 crore with sequential growth of 6.20% in sales revenues. Volume growth was robust across EPD, IDV and SIS. Transportation sector grew revenues 3.8% sequentially and 30.4% yoy while the Healthcare vertical grew revenues 8.2% sequentially and 55.9% yoy. Elxsi managed to gain market share in automotive and media in Europe region. Tata Elxsi has also sharpened its EV capabilities substantially. Revenues were hit by cross currency headwinds in the quarter. Here is a gist of the financials.

Tata Elxsi

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 781.84

₹ 597.76

30.79%

₹ 736.21

6.20%

Net Profit (Rs cr)

₹ 174.28

₹ 125.33

39.06%

₹ 184.72

-5.65%

Diluted EPS (Rs)

₹ 27.98

₹ 20.13

₹ 29.66

Net Margins

22.29%

20.97%

25.09%

Let me not turn to the profitability of Tata Elxsi. PAT was up 39.1% at Rs174.28 crore with EBITDA margins at 29.7% in the quarter; one of the best in the industry. Operating profits of software development and services grew 33% at Rs255 crore while the EBITDA of system integration and support services more than doubled, but base was relatively small. Net margins at 22.29% was higher than the 20.97% recorded in Q2FY22. However, on a sequential basis, net margins were lower compared to 25.09%. This is largely on account of a sharp spike in the employee costs.

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