Engineering and technology services firm Tata Elxsi Ltd reported a 15% rise in its second-quarter profit on October 10, fuelled by healthy demand in its transportation wing.
The company's net profit rose to Rs 229 crore year-on-year for the quarter ended Sept. 30.
Revenue from operations rose 8% to Rs 955 crore.
Revenue from the company's transportation unit grew 16% year-on-year on the back of deals signed in the quarter, including a $50 million multi-year contract with a European company. The division accounts for about 55.7% of revenue in the company's software development and services segment, which in turn contributes more than 97% to total revenue.
Shares of the company closed 1.9% higher ahead of results on October 10.
Manoj Raghavan, CEO and Managing Director, Tata Elxsi said: "Our operational and offshore delivery excellence, fiscal discipline, and differentiated offerings, have
contributed to our EBITDA margins expanding by 70 basis points to 27.9% for the quarter. Our PAT grew by 24.6% QoQ to Rs 229.4 crore, with the superior bottom-line performance further aided by R&D incentives and tax credits from previous years. Our strategic focus on expanding our business in Japan, emerging markets and capitalising on the India opportunity, is now starting to significantly contribute to our growth. During the quarter, our revenue from India has grown by 31.2% YoY, while Japan and emerging markets grew smartly at 81.9% YoY.
"Our transportation business continues to power growth for the company, registering a strong revenue growth of 8.8% QoQ. Our deep and scaled ADAS, Connected, Electric and Software Defined Vehicle (SDV) capabilities are helping us win large deals with global OEMs across the world, positioning us well for the continued transformation of the automotive industry."
Engineering, research and design (ER&D) services, which include technology support to industries such as automotive and communications, contribute a sixth of the revenue to India's $254-billion technology sector.
Companies such as Tata Elxsi and peer L&T Technology Services are expected to benefit from the ER&D sector quadrupling to as much as $170 billion between 2023 and 2030, National Association of Software and Service Companies has said.
L&T Technology Services will report results on October 16.
With inputs from Reuters
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