Tata Elxsi share price hits 52-week low after Q1 results 2026; brokerages cut target prices - Should you buy or sell?

Tata Elxsi share price: IT major Tata Elxsi share price fell more than 6% to a 52-week low of ₹3,473.75 on the BSE on Wednesday, July 15, after the company announced its June quarter (Q1FY27) results.

For the quarter ended June 30, 2026, Tata Elxsi reported a net profit of ₹170.6 crore, up 18.2% year-on-year (YoY). Revenue from operations increased 14.5% YoY and 2.8% quarter-on-quarter (QoQ) to ₹1,021.1 crore.

The company's operating performance also remained healthy, with EBITDA rising 15.7% YoY to ₹216 crore. It reported an EBITDA margin of 21.2%, while the net profit margin stood at 16.1% during the quarter.

However, revenue from Europe declined 1.9% sequentially as automotive original equipment manufacturers (OEMs) continued to reduce engineering spending. Tata Elxsi said its margins were impacted by delivery mix, higher investments and the annual wage hike.

The IT stock has declined 13% in the past one month, 22% in three months, 36% in six months and 45% over the past one year. Tata Elxsi had touched its 52-week high of ₹6,423.10 in July 2025 and is now trading about 46% below that level.

Should you buy or sell the IT stock?

Motilal Oswal has maintained its 'Sell' rating on Tata Elxsi with a target price of ₹3,100, implying a downside of around 16% from current levels.

According to the brokerage, Tata Elxsi's June quarter performance does little to change its broader growth outlook. Motilal Oswal believes a meaningful recovery in growth will depend on an improvement in the Transportation business, where client spending, particularly in Europe, remains cautious. It also highlighted that the company's EBIT margin declined to 19%, well below its estimate of 21.5%.

Kotak Securities also maintained its 'Sell' rating on Tata Elxsi and lowered its target price to ₹3,000 from ₹3,800.

The brokerage described it as "another muted quarter due to sustained weakness in automotive," adding that recent large deals and investments continue to weigh on profitability. While it retained its expectation of high single-digit growth in FY27E, Kotak Securities said the margin reset has prompted it to reduce its FY27-FY29 earnings estimates by 10-14%.

Moreover, Choice Institutional Equities has downgraded the stock to 'Sell' and reduced its target price to ₹3,150 from ₹3,650, after cutting its FY27 and FY28 earnings estimates by 2.7% and 6%, respectively.

The brokerage said Tata Elxsi's Q1FY27 performance was weaker than expected, with margins impacted by higher project costs and continued strategic investments despite healthy growth in the Transportation and Media & Communications businesses.

The brokerage also noted that Tata Elxsi is accelerating investments in artificial intelligence (AI) capabilities, platforms and talent to strengthen its domain-plus-AI offerings. While these investments are expected to improve the company's long-term competitiveness and growth prospects, they are also likely to keep margins under pressure in the near term.

Tata Elxsi Q1 commentary

During the quarter, Tata Elxsi launched ViTEL, a GenAI-powered material intelligence platform, and AnaTEL, an AI-native software development platform for the medtech and healthcare industry.

The company said it remains well positioned to address customers' strategic priorities across its focus verticals, including connected, intelligent and software-defined products, digital transformation, AI-led efficiencies, customer experience and engineering modernisation.

Tata Elxsi added that it remains focused on delivering sustainable growth by strengthening relationships with key customers, pursuing long-term strategic deals, adding marquee clients and maintaining its industry-leading margins.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.