India’s Tata Elxsi posts fourth straight quarterly profit fall amid auto slowdown

Oct 9 (Reuters) – Indian engineering research and development (ER&D) firm Tata Elxsi reported a fourth straight quarter of widening profit fall on Thursday, as its key transportation business declined amid uncertain markets and geopolitical tensions. The company, which relies heavily on the auto industry, said net profit fell 32.5% to 1.55 billion rupees ($17.46 million) in the July-September period year-on-year. In the previous three quarters, it had reported a profit fall of between 3.6% and 21.6%. ER&D firms, which depend on work outsourced by U.S. and European clients, have been under pressure as global automotive clients cut back on investments and R&D spending, reeling from the impact of U.S. tariffs, according to analysts. Tata Elxsi, which counts Jaguar Land Rover (JLR) among its largest clients, said in July that industry- and customer-specific issues had affected R&D spending and decision-making cycles across geographies. It added that the global automotive industry remains in flux amid uncertainties surrounding the Chinese market and tariffs, casting a cloud over clients’ R&D plans, while major auto parts makers continue to face challenges. JLR's temporary production shutdown following a September cyber attack in Britain is also expected to weigh on Tata Elxsi’s quarterly revenue, analysts had said ahead of the results. Revenue from the transportation segment – Tata Elxsi's biggest – fell 9.9% year-on-year in the second quarter. The segment provides software and engineering services to auto and auto parts makers, including design of parts and technologies. Its core profit margin came in at 21.1% in the quarter, down from 27.9% a year ago, but bigger than the 20.9% of last quarter. Overall revenue fell by 3.9% to 9.18 billion rupees. Shares of the company closed 2.1% higher ahead of results. ($1 = 88.7830 Indian rupees) (Reporting by Aleef Jahan, Komal Salecha; Editing by Harikrishnan Nair)

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