Below is a structured extraction and summary of the audited financial results filing of Tata Elxsi Limited for Q2 FY26 (quarter ended September 30, 2025), suitable for an investment analysis team:

1. Auditor’s Note

• Opinion: Unmodified (clean) audit opinion.
• Concerns/Qualifications: None reported.
• Summary: The auditors (B S R & Co. LLP) have audited the quarterly and half-year financial results and found them to be presented fairly and in accordance with applicable accounting standards (Ind AS 34). No qualifications, material uncertainties, or issues were noted.

2. Financial Performance

Notes:

• Revenue for Q2 FY26 declined 3.9% YoY (₹91,810.23 lakhs vs ₹95,508.63 lakhs).
• Net profit for Q2 FY26 declined 32.5% YoY (₹15,481.91 lakhs vs ₹22,943.20 lakhs).
• Sequential quarter growth in revenue: +2.9% (Q2 over Q1 FY26).
• Sequential quarter growth in net profit: +7.3% (Q2 over Q1 FY26).
• H1 FY26 revenue and net profit declined vs H1 FY25 by 3.8% and 27.6% respectively.
• Margins (Net profit margin approx. 16.9% in Q2 FY26 vs 24.0% in Q2 FY25) show contraction.

3. Detailed Notes / Management Commentary

• Accounting Policies: No changes or material adjustments reported.
• Audit: Unmodified opinion with no qualifications.
• Going Concern: No material uncertainty; company continues as a going concern.
• Other Notes:
  • Earnings per share for interim periods are not annualized.
  • No subsidiaries, associates, or joint ventures as of September 30, 2025.
• Sector-specific KPIs: Not explicitly disclosed in the filing.
• Other Commentary: None provided in the document.

4. Segment Information

• Segment results for System integration & support services not fully provided.
• Software development & services is the dominant segment (~97% of revenue).
• Segment profit shows a decline YoY, consistent with overall profit decline.

5. Capex, Projects, and Corporate Activity

• Capital Expenditure:
  • Q2 FY26 Capex (PPE and intangibles): ₹226.86 lakhs (down from ₹1,158.16 lakhs in H1 FY25).
  • Capital work-in-progress reduced significantly from ₹161.73 lakhs (Mar 31, 2025) to ₹5.84 lakhs (Sep 30, 2025).
• Investments in Bank Deposits:
  • Large movements in bank deposits: ₹1,02,800 lakhs invested and ₹1,16,410 lakhs redeemed in H1 FY26.
• Acquisitions/Disposals: None reported.
• Impairments/Writedowns: None reported.
• Restructuring/Cost-cutting: No explicit mention.
• Dividend: ₹46,713.42 lakhs paid in H1 FY26 (up from ₹43,593.51 lakhs in H1 FY25).

6. Standalone vs Consolidated

• The company has no subsidiaries, associates, or joint ventures as of September 30, 2025.
• Therefore, standalone and consolidated financials are the same.
• All figures presented are standalone and consolidated.

Additional Financial Highlights

Balance Sheet (₹ lakhs)

• Equity declined mainly due to dividend payout and profit contraction.
• Cash and cash equivalents decreased from ₹13,527.66 lakhs to ₹11,917.56 lakhs.
• Lease liabilities reduced slightly.

Cash Flow Summary (₹ lakhs)

• Operating cash flow declined YoY, reflecting lower profitability.
• Investing cash flow improved due to lower capex and higher maturity of deposits.
• Financing cash outflow increased due to higher dividend payments.

Summary for Investment Analysis Team

Actionable Insights:

• The company is experiencing a YoY decline in revenue and profitability, with margin pressure evident.
• Sequential improvement in Q2 FY26 suggests some stabilization.
• Strong cash generation but increased dividend payout reduces cash reserves.
• No major corporate actions or strategic changes announced.
• Lack of disclosure on operational KPIs limits deeper operational analysis.
• Monitor upcoming quarters for margin recovery and revenue growth signals.

End of Analysis