Tata Elxsi Q3 FY26 Net Profit Declines to ₹1088.92 Cr Due to ₹956.89 Cr Exceptional Item
Tata Elxsi reported Q3 FY26 net profit of ₹1088.92 Cr, down from ₹1990.06 Cr in Q3 FY25, due to a ₹956.89 Cr exceptional item related to New Labour Codes. Revenue from operations was ₹9534.74 Cr for the quarter. Basic and Diluted EPS stood at ₹17.48.
While the exceptional item significantly impacted the quarterly profit, the core business operations (revenue and segment results before exceptional items) appear stable. The long-term impact of the New Labour Codes is yet to be fully assessed, making the immediate impact medium.
The net profit for the quarter shows a significant decline compared to the previous year due to a substantial exceptional item related to new labor codes, indicating a negative short-term financial impact.
Tata Elxsi Limited announced its audited financial results for the quarter and nine-months ended December 31, 2025, following approval by the Board of Directors at a meeting held on January 13, 2026. The meeting commenced at 3:00 p.m. IST and concluded at 4:30 p.m. IST.
For the quarter ended December 31, 2025, the company reported a net profit of ₹1088.92 lakh (₹1088.92 crore). This figure is impacted by an exceptional item of ₹9568.88 lakh (₹956.89 crore) which pertains to the one-time impact of the New Labour Codes effective November 21, 2025. Under Ind AS 19, these legislative amendments constitute a plan amendment, requiring immediate recognition of past service cost. The company has recognized an estimated one-time increase in provision for employee benefits amounting to ₹9568.88 lakh as an exceptional item in this reporting period. The Government of India is in the process of notifying related rules, and the impact will be evaluated and accounted for in future periods.
Revenue from operations for the quarter stood at ₹95,347.43 lakh. Total expenses were ₹75,755.20 lakh. Profit before exceptional item and tax was ₹24,196.05 lakh, while profit before tax after the exceptional item was ₹14,627.17 lakh. Tax expense for the quarter was ₹3,737.95 lakh.
For the nine-month period ended December 31, 2025, revenue from operations was ₹2,76,367.25 lakh, and the net profit was ₹40,807.90 lakh. The company's Basic EPS for the quarter was ₹17.48 and Diluted EPS was ₹17.48.
The company's business is structured into two industry verticals: Software Development & Services and System Integration & Support Services. For the quarter ended December 31, 2025, Software Development & Services contributed ₹93,033.93 lakh to segment revenue and ₹30,773.84 lakh to segment results. System Integration & Support Services contributed ₹2,313.50 lakh to segment revenue and a loss of ₹196.23 lakh to segment results.
The audited financial results, along with the auditor's report with an unmodified opinion, are available on the company's website (www.tataelxsi.com) and the websites of BSE Limited (www.bseindia.com) and the National Stock Exchange of India Limited (www.nseindia.com).
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