Q2 FY23 (JUL-SEP 2022) Concall Summary

TATA ELXSI LIMITED

Concall Date: 14 October 2022

Revenue: ₹763.2 cr (▲28.2%) Net Profit: ₹174.3 cr (▲39.1%)

FINANCIAL HIGHLIGHTS
PARTICULARS Q2 FY23 Q2 FY22 Change %
(₹ cr) (₹ cr) YoY
Revenue from Operations 763 595 28.2%
Net Profit 174 125 39.1%
EBITDA Margin 29.7% (Q2)
PAT Margin 22.3% (Q2)
Attrition Rate* 18.7% (LTM)
* LTM-last twelve months, IT services
• The company’s growth was primarily volume led, with all three segments comprising Embedded
Product Design (EPD), Industrial Design & Visualization (IDV) and System Integration & Support (SIS)
showing growth of 3.8%, 13.5% and 26.2% QoQ respectively.
• EBITDA stood at ₹226.5 crore during the quarter, a decline of 4.9% QoQ. The increase in the
headcount and expansion in existing locations led to the decline in EBITDA.
• Increase in employee cost, facilities operations costs on the back of resumption of hybrid mode of
work, opening of new offices, higher travel cost etc., affected the margins of the company.
• On an overall basis, the currency movement had a positive impact of 40 bps on revenue and 30 bps
in bottom line.

BUSINESS HIGHLIGHTS
SEGMENT WISE
• In Q2 FY23, the segmental revenue mix was: EPD 87.6%, IDV 9.7% and SIS 2.7%.
• During the quarter, in CC terms: EPD, IDV and SIS registered a QoQ growth of 3.1%, 15.5% and 26%,
respectively.
• In Q2 FY23, EPD offshore & onshore revenue mix stood at 75.2% & 24.8%.
• During the quarter, the revenue by contract type was: fixed price 49.6% and time & material at
50.4%.

INDUSTRY WISE
• In Q2 FY23, revenue mix by industry for the EPD segment stood at: Media & Communications
42.4%, Transportation 41.5% and Healthcare & Medical Devices at 16.1%.
• Healthcare & Medical devices segment during the quarter increased by 5.1% QoQ in CC terms
driven by new product engineering and regulatory services.
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TATA ELXSI LIMITED

• In CC terms, Transportation segment grew by 4.6% QoQ, aided by large deals in Electric Vehicle (EV),
Advanced Driver-Assistance Systems (ADAS) and adjacencies in rail and off-road vehicles.
• Media & Communications segment observed a growth of 1% QoQ in CC terms, aided by platform-
led deals and entry into new operator accounts.

GEOGRAPHY WISE
• In Q2 FY23, revenue mix in terms of geographies stood at: Americas 43.2%, Europe 34.1%, India
16.6% and rest of the world (RoW) at 6.1%.

DEAL WINS
• Tata Elxsi was selected by a global leader in transportation systems for train design and systems
engineering.
• They won a multimillion-dollar development program from a leading US based off-road vehicle
manufacturer for a next generation platform for vehicle connectivity and infotainment.
• Tata Elxsi was selected by a leading service provider for a multi-million-dollar engagement which
leverages capabilities of their platform QoEtient.
• A global medical devices leader has selected them for new product development and technology
support on Medical Devices Reporting (MDR) compliance.

HUMAN RESOURCES
• In Q2 FY23, the company added 1,532 employees (net), taking the total to 11,679 employees as on
30th September 2022. They added ~1,100-1,150 freshers and remaining were in the form of lateral
employees.
• They had also invested in expanding their facilities in existing locations of Bengaluru, Chennai and
Pune, and new talent bases in Kozhikode and Hyderabad.

UPDATES
• Despite numbers being muted in Europe due to unfavourable currency movement, the company
stated that they are gaining market share in both Automotive and Media & Communications
segments. However, on an overall basis they saw some deferments of projects in Media &
Communications business. They further stated that this may continue for another quarter since
customers are cautious with their spending.

FUTURE OUTLOOK
• In the coming quarter, the company may have to take new offices to cater the increasing headcount.
• With the drop in utilization rate during the quarter, the management would be cautious with bulk
hiring in the coming quarters and would be more focused in improving the utilization rate.
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TATA ELXSI LIMITED

SEBI Registration no: IHN3000007493

Disclaimer:

This document has been prepared to provide a brief summary of the conference call conducted by the companies
and is intended to be used for learning enhancements. Nothing contained herein should be construed as a
recommendation on any stock or sector.