Tata Elxsi Ltd’s shares traded flat on October 11, despite the company reporting a 15% increase in its second-quarter profit to Rs 229 crore. This growth was driven by strong demand in its transportation division. The company’s revenue from operations also went up by 8% compared to the previous year, reaching Rs 955 crore.

Tata Elxsi’s net profit increased by 24.6% compared to the previous fiscal quarter. This strong performance was supported by research and development incentives and tax credits from previous years.

The company’s revenue from the transportation unit grew by 16% compared to the previous year, mainly due to new deals, including a multi-year contract worth USD 50 million with a European company. This unit contributes over 55.7% to the company’s software development and services segment and more than 97% to total revenue.

Tata Elxsi’s stock has fallen by around 10% this year, while the Nifty index has seen a 14% increase. Over the past 12 months, Tata Elxsi’s stock has risen by 7%, while the Nifty index has seen a 27% increase.

Tata Elxsi’s CEO and Managing Director, Manoj Raghavan, stated that the company’s operational efficiency, fiscal discipline, and unique offerings led to a 70 basis point increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) margins to 27.9% for the quarter, providing confidence in the company’s management.

According to Raghavan, the company’s strategic focus on expanding business in Japan and emerging markets and taking advantage of opportunities in India is now contributing significantly to its growth, instilling optimism in its prospects.

The transportation business remains a key driver of the company’s growth. The CEO added that the company’s capabilities in Advanced Driver Assistance Systems (ADAS), Connectivity, Electric, and Software-Defined Vehicles (SDV) have helped it secure major deals with global Original Equipment Manufacturers (OEMs), positioning it well for the ongoing transformation of the automotive industry.

The engineering, research, and design (ER&D) services, which provide technology support to industries such as automotive and communications, contribute a sixth of the revenue to India’s USD 254-billion technology sector, highlighting Tata Elxsi’s significant contribution to the country’s technological progress.

At 12:42 pm, Tata Elxsi stock was trading flat at Rs 7,734.80 on the National Stock Exchange (NSE).

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