Tata Elxsi Limited (NSE:TATAELXSI) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

Last week saw the newest quarterly earnings release from Tata Elxsi Limited (NSE:TATAELXSI), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of ₹9.2b were in line with what the analysts predicted, Tata Elxsi surprised by delivering a statutory profit of ₹24.85 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tata Elxsi after the latest results.

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Taking into account the latest results, Tata Elxsi's 17 analysts currently expect revenues in 2026 to be ₹37.2b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 3.7% to ₹104 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹37.7b and earnings per share (EPS) of ₹110 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for Tata Elxsi

The consensus price target held steady at ₹4,594, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Tata Elxsi, with the most bullish analyst valuing it at ₹5,766 and the most bearish at ₹4,001 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Tata Elxsi's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. 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 plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹4,594, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Tata Elxsi analysts - going out to 2028, and you can see them free on our platform here.

You can also see our analysis of Tata Elxsi's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.