Tata Elxsi, a global design and technology services company, announced its third-quarter results for the financial year 2025-26 (Q3 FY26), reporting a substantial decline in net profit. The company's profit after tax (PAT) slumped by 45.3% year-on-year (YoY) to ₹108.9 crore for the quarter ending December 31, 2025. This significant drop was primarily attributed to a one-time exceptional charge related to the implementation of new labour codes. Quarter-on-quarter (QoQ), the net profit saw a 29.7% decline from the previous quarter's ₹154.8 crore. Despite the sharp fall in profit, Tata Elxsi's revenue from operations for Q3 FY26 showed a modest increase of 1.52% YoY, reaching ₹953.5 crore. On a QoQ basis, revenue advanced by 3.9%. The transportation business was a key growth driver, benefiting from accelerated ramp-ups in software-defined vehicle (SDV) deals. However, the Media & Communications and Healthcare & Life Sciences verticals faced headwinds due to seasonal furloughs and delays in key deal awards at the end of the quarter. Following the earnings announcement on January 13, 2026, the company's share price reacted negatively, slumping as much as 3.62% to an intraday low of ₹5,583 apiece on the National Stock Exchange (NSE) on January 14, 2026. Some reports indicated a 2.5% cut in share price. Brokerage firms have offered mixed views, with some reiterating 'Sell' ratings and flagging potential downside risks due to rich valuations and muted visibility in certain segments, despite some positive revenue and margin performance. The stock's current trading multiples are considerably higher than the Nifty 50's average.