Tata Elxsi Stocks: According to the Motilal Oswal research reports on Tata Elxsi stocks, the reported revenue of USD105m in 2QFY26, which was in line with our estimate and up 1% QoQ in CC terms. Media and Communications led the growth, increasing 3.7% QoQ CC, while Transportation/HLS saw a 0.5%/4.6% QoQ CC dip. The EBIT margin was 18.5% (up 30bps QoQ), which was less than the 20.3% we had projected. At INR1,548m (below our estimate of INR1,662m), PAT was up 7.2% QoQ and down 32.5% YoY.

Compared to 1HFY25, revenue, EBIT, and PAT decreased 4%, 28%, and 28% YoY in Indian rupees for 1HFY26. In 2HFY26, we anticipate a 4% increase in revenue and a 9%/4% YoY fall in EBIT/PAT. The short-term impetus is being hampered by muted tech expenditures in the media and automotive sectors. TELX’s margins, which were previously a defining strength, are now under significant pressure. To reach our target price of INR4,400, we value TELX at 31x June 27E EPS. Sell rating confirmed.

Tata Elxsi Q1 Results:
For the July–September quarter of the fiscal year 2025–26 (FY26), the Tata Group company reported a lackluster set of results, with a 32.5% year-over-year (YoY) decline in net profit to ₹154.8 crore. In a regulatory filing from the previous year, it declared a net profit of ₹229.4 crore.

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Why Should You Sell Tata Elxsi Stocks?
The analyst recommendation states that the media vertical led revenue growth in Q2, while the auto and healthcare sectors continued to show sluggish performance. Due to ongoing issues in the media and communication sectors, growth momentum is unlikely to continue in H2 FY26.

Although experts think a major comeback would not materialize given the seasonal slowdown in Q3, management anticipates that H2 sales growth will surpass H1 growth. It kept the Tata Elxsi shares at a “sell” rating.

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