# Tata Elxsi shares drop after weak Q1 results Motilal Oswal predicts 16% downside from current levels - **Source:** [Economic Times](https://brifing.si/source/37791137-c35a-4ffe-b6a9-fe103afc9e48) - **Published:** 2026-07-15 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/f0174306-db54-4d6d-87e8-80c17be5c14d ## Tata Elxsi's Q1 performance Tata Elxsi reported an 18.2% YoY increase in net profit to Rs 170.6 crore for Q1 2026. Revenue rose 14.5% to Rs 1,021.1 crore. Despite these results, shares fell by 6%. ## Motilal Oswal's view Motilal Oswal maintained its Sell rating on Tata Elxsi with a target price of Rs 3,100, implying a 16% downside from current levels. The brokerage noted that the company's growth outlook remains unchanged. ## Weakness in the Transportation segment Tata Elxsi's Transportation business, which contributes 55% of revenue, remained weak. Cautious client spending in Europe negatively impacted the company's growth. Motilal Oswal highlighted recovery depends on this segment. ## Margins below expectations The company's EBIT margin contracted to 19%, missing estimates. Motilal Oswal pointed out that margins were significantly below expectations due to higher project costs and strategic investments. ## AI investments and future Tata Elxsi is investing in AI capabilities and platforms to drive long-term growth. New platforms like ViTEL and AnaTEL aim to strengthen its competitiveness in the medtech and healthcare sectors. ## Analysts' cautious stance Choice Institutional Equities downgraded Tata Elxsi to Sell and cut its target price. Weakness in the European automotive market and delays in healthcare order conversions are seen as key risks for the company. ## Sources covering this story - https://economictimes.indiatimes.com/markets/stocks/news/tata-elxsi-shares-crash-6-after-weak-q1-results-why-motilal-oswal-sees-16-downside-from-current-levels/articleshow/132405822.cms — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._