Tata Group stock jumps after signing MoU with Garuda Aerospace at Aero India 2025

The shares of leading design and technology service providers gained up to 1% after the company signed a Memorandum of Understanding (MoU) with Garuda Aerospace at Aero India 2025.

Price Action

With a market capitalization of Rs 38,407.18 crore, the shares of Tata Elxsi Ltd were trading at Rs 6,161.30 per share, increasing 0.71 percent as compared to the previous closing price of Rs 6,117.90 apiece.

Reason for rise  

The shares of Tata Elxsi Ltd have seen positive movement after Tata Elxsi Ltd signed a Memorandum of Understanding (MoU) with Garuda Aerospace at Aero India 2025  to establish a Centre of Excellence for indigenized UAV (Unmanned Aerial Vehicle) Design and Development.

Additionally, this partnership establishes a dedicated UAV design, engineering, and certification center to develop indigenous drone technologies specifically for Indian defence applications, along with agriculture, and smart cities, supporting the ‘Make in India’ initiative.

Moreover, Tata Elxsi will design, develop, test, and certify UAV subsystems, leveraging expertise in avionics, AI, and energy optimization to enhance efficiency and reduce costs. Partnering with Garuda Aerospace, the initiative will develop drones for defense, delivery, agriculture, and ISR applications, accelerating development by six months.

Meanwhile, the Indian defence forces and Border Security Force are expected to be key beneficiaries of this collaboration, gaining access to cutting-edge UAV capabilities. Additionally, this initiative will create new employment opportunities and contribute to workforce development in the aerospace sector.

Financial Update

Recently, the company announced disappointing results in Q3FY25, revenue magnified by 3 percent on a year-on-year basis from Rs 914 crore in Q3FY24 to Rs 939 crore in Q3FY25. However, on a Quarter-on-Quarter basis, revenue fell by 2 percent from Rs 955 crore in Q2FY25 to Rs 939 crore in Q3Y25.

Moreover, net profit fell by 3 percent on a yearly basis from Rs 206 crore in Q3FY24 to Rs 199 crore in Q3FY25, meanwhile, on a quarter-on-quarter basis, net profit also plummeted by 13 percent from Rs 229 crore in Q2FY25 to Rs199 crore in Q3FY25.

Also read: Fertilizer stock jumps 5% after announcing ₹1,539 Cr investment for plant expansion

Business Segment Performance

The company reported 4.4% growth in Transportation, driven by a $50M European OEM deal and partnerships with Nidec and Emerson. Media and Communication declined 2.2% but saw wins in RDK broadband for Qualcomm and AI initiatives. Healthcare dropped 11.2%, adding key clients and launching robotics innovations with Skanray.

Strategic Focus

The company aims to expand in Japan and emerging markets while exploring new verticals like defense and semiconductors to diversify revenue. Management remains focused on achieving double-digit constant currency growth for FY ’25, despite market challenges, highlighting a strategic push for sustained growth and sectoral diversification.

Margin Guidance

Management expects margins to stabilize and improve as top-line growth resumes, despite current impacts from wage hikes. The anticipated tax rate for the year is 24.5%-25%, with future rates projected to exceed 25%.

Company Profile

Tata Elxsi offers complete services, including research and strategy, electronics and mechanical design, software development, validation, and deployment.

Written by:- Abhishek Singh

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