Tata Elxsi Limited Just Missed Earnings - But Analysts Have Updated Their Models

Tata Elxsi Limited (NSE:TATAELXSI) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to ₹6,066 in the week after its latest quarterly results. It looks like the results were a bit of a negative overall. While revenues of ₹8.9b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.4% to hit ₹23.18 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Tata Elxsi's 16 analysts are forecasting 2026 revenues to be ₹37.8b, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 7.4% to ₹111 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹39.0b and earnings per share (EPS) of ₹124 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

Check out our latest analysis for Tata Elxsi

Despite the cuts to forecast earnings, there was no real change to the ₹4,804 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Tata Elxsi analyst has a price target of ₹7,008 per share, while the most pessimistic values it at ₹3,799. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Tata Elxsi's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2026 being well below the historical 17% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tata Elxsi.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tata Elxsi going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Tata Elxsi Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.