Indian engineering and technology services firm Tata Elxsi reported a 14.7% rise in its second-quarter profit on Thursday.Indian engineering and technology services firm Tata Elxsi reported a 14.7% rise in its second-quarter profit on Thursday, exceeding street expectations, fuelled by healthy demand in its transportation wing. The company's net profit rose to 2.29 billion rupees ( USD 27.28 million) year-on-year for the quarter ended Sept. 30.
Analysts had expected 2.05 billion rupees, according to data from LSEG. Revenue from operations rose 8.3% to 9.55 billion rupees, in line with analysts' estimate of 9.56 billion rupees. Revenue from the company's transportation unit grew 16% year-on-year on the back of deals signed in the quarter, including a USD 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 Thursday. KEY CONTEXT 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 USD 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 USD 170 billion between 2023 and 2030, India's National Association of Software and Service Companies has said. L&T Technology Services will report results on Oct. 16.
