Corporate Development     

Published: January 31, 2025
Updated: January 31, 2025

Tata Elxsi

Tie-up with NAL for air mobility solutions

Tata Elxsi (TEL), a global leader in design and technology services, and CSIR-National Aerospace Laboratories (CSIR-NAL) has signed an MoU to establish a ‘Strategic Partnership for Advanced Air Mobility’. This collaboration is focused on driving innovation in emerging areas such as unmanned aerial vehicles (UAVs), urban air mobility (UAM), and electric vertical take-off and landing (e-VTOL) aircraft. The partnership combines NAL’s deep aeronautical expertise and TEL’s technological capabilities in electrification, AI/ML, sensor fusion, and certification processes to support global and Indian markets.

The global market for UAVs and UAM is rapidly evolving, with applications spanning industries such as logistics, agriculture, defence and urban transportation. This partnership will accelerate product development cycles for these sectors by providing access to advanced testing infrastructure, methodologies and expertise. TEL and CSIR-NAL will jointly focus on technologies such as aerodynamic design, autonomous systems and secure communications to address the unique needs of both manned and unmanned air mobility systems.

India presents significant opportunities through initiatives like ‘Make in India’ and indigenisation, and the growing demand for advanced air mobility solutions. The partnership will contribute to building a robust ecosystem of precision manufacturing, component suppliers and tool vendors. It will also help shape industry regulations and standards, fostering a sustainable framework for innovation and commercialisation in India.

NEXT-GEN TRAVEL

Manoj Raghavan, MD & CEO of the company, said, “We believe the future of aerospace innovation lies in technologies like UAVs and Urban Air Mobility. This strategic partnership with NAL combines our strengths to push the boundaries of innovation and accelerate the development of next-generation air mobility solutions for our customers globally.” Dr Abhay A Pashilkar, Director of CSIR-NAL, said, “Partnering with Tata Elxsi marks a crucial development in our mission to innovate within the aerospace sector. CSIR-NAL’s deep expertise in aerospace research and testing, along with TEL’s advanced technology and design expertise, will help us develop innovative, scalable and sustainable solutions that will shape the future of urban transportation.” As part of this collaboration, TEL and CSIR-NAL also envision creating a robust ecosystem that integrates precision manufacturing, tools, components and vendor partnerships. This ecosystem aims to bring together key stakeholders to foster innovation, enhance scalability and address the unique requirements of advanced air mobility systems.

STABLE Q3FY25

Commenting on the company’s performance in the third quarter of FY25, Mr Raghavan said, “We are happy to report a steady quarter with revenue from operations at Rs 939.2 crore. During the quarter, EBITDA margins stood at 26.3% and the PBT margin was reported at 26.1%. We continue to see positive outcomes of our strategic business focus on Japan, emerging markets and capitalising on the India opportunity. During the quarter, our revenue from India has grown by 21.9% YoY, while Japan and emerging markets grew at 66.8% YoY. This will serve us well over the next few quarters even as we navigate geopolitical uncertainty, currency volatility and industry- specific challenges in Europe and the US.

He added, “The automotive industry has seen significant business challenges in the past few months, with OEMs especially in the US and Europe reporting sales and growth challenges in their major markets. This has impacted new deal closures, and Tier 1 supplier spend. Amidst this business environment, Tata Elxsi continues to do well to win and execute on the large deals won over this year and demonstrate differentiated value to customers, to protect and grow revenues in a difficult quarter for the entire automotive industry.

“During the quarter, we announced an Offshore Development Centre for Suzuki Corporation, Japan to support their global technology, software and engineering development. Suzuki’s Chief Technology Officer, Katsuhiro Kato, highlighted the importance of the centre as a strategic and core component of Suzuki’s innovation strategy, helping it accelerate software and virtual development across Connected, Autonomous and Electric technologies.

PRODUCT DISPLAY

We are delighted to be launching our AVENIR SDV software suite at the CES 2025 Conference in Las Vegas, the premier global showcase for technology innovation. AVENIR encompasses a cloud-native virtual development platform and a hybrid global validation platform, and is powered by the Snapdragon Digital Chassis platform, in partnership with Qualcomm. We offer a compelling proposition of a ready-to-adopt solution, coupled with deep digital and software expertise and scaled talent base, to help global OEMs shift-left and accelerate their SDV and future mobility roadmaps.

“Our Media & Communication business reported QoQ CC growth in a quarter that is typically soft and affected by furloughs. We are positioned well to help customers in the media, entertainment and telecom industry on all three levers of growth, efficiency, and innovation. We won a large multi-year deal with a US-headquartered MSO to develop and manage their portfolio of applications and expect to ramp this up over the next few quarters. We are positioned well in some very large deals across the world, with decisions and outcomes expected in the coming quarter and beyond. “Our Healthcare & Lifesciences business reported growth of 1.1% QoQ. We continue to win new marquee healthcare customers, and our Gen AI powered regulatory, digital engineering and sustainability offerings are seeing significant traction in the market.

SOME DELAYS

Our Systems Integration (SIS) business witnessed decision delays in some large projects that had a significant impact on revenues in the quarter. While we are aiming to win and execute them over this quarter and beyond, we continue to work on pivoting the business away from project based to annuity and service based revenue streams. “We step into the fourth quarter of this financial year with the confidence of large automotive deal wins in the year and quarter that will see continued ramp-ups even as we navigate the current volatility in the automotive market; the stability and return to growth in our healthcare and media & communications verticals, and large strategic deals in the pipeline across all our key verticals.”

TECH LEADER

Tata Elxsi is amongst the world’s leading providers of design and technology services across industries, including Automotive, Broadcast, Communications, Healthcare and Transportation. The company is helping customers reimagine their products and services through design thinking and application of digital technologies such as IoT (Internet of Things), Cloud, Mobility, Virtual Reality and Artificial Intelligence.