Tata Elxsi stock call: Brokerages cautious after weak Q2 results, flag challenges; should you buy, sell or hold

Brokerages remain divided on Tata Elxsi after the company’s second-quarter profit fell sharply, even as sequential performance showed signs of stabilisation. The stock fell 2 percent today to Rs 5,464 on the NSE after the Q2 results were released post-market on Thursday.

The Tata Group company’s net profit for Q2 FY26 dropped 32.5 percent year-on-year to Rs 154.82 crore, while revenue from operations slipped 4 percent to Rs 918.10 crore. EBITDA stood at Rs 193.3 crore, with a margin of 21.1 percent.

Tata Elxsi share price outlook: Brokerages largely cautious

Motilal Oswal Financial Services maintained a ‘Sell’ rating with a target price of Rs 4,400, warning of over 21 percent downside. “While management commentary on a better second half and double-digit FY27 growth appears encouraging, near-term growth remains patchy,” the brokerage said. It cited sluggish tech spending in automotive, execution delays, and continued weakness in media as key drags.

• Also read | Tata Elxsi share price falls after Q2 profit drops 33%; brokerages flag near-term challenges

Avendus also retained a ‘Sell’ rating with a target of Rs 4,690, trimming its FY26 and FY27 revenue estimates by 2 percent. Kotak Institutional Equities reiterated its ‘Sell’ call with a target of Rs 4,000, noting that while revenue slightly beat expectations, profit was weak, and the cybersecurity issue at Jaguar Land Rover had a modest impact.

Selective optimism from HDFC Securities

HDFC Securities maintained an ‘Add’ rating with a target price of Rs 5,765, implying a potential upside of about 3 percent. The brokerage said Tata Elxsi is “well-positioned to benefit from increasing offshoring in the automotive segment,” adding that Europe and Japan are showing good traction as OEMs restart investments. It expects EBIT margins to improve as utilisation rises to 75 percent by FY26 and 80 percent by FY27.

Choice Institutional Equities, meanwhile, kept a ‘Sell’ rating with a target price of Rs 4,120, saying near-term challenges persist despite early signs of operational stabilisation.

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