Explained – Why are Tata Tech and other ER&D stocks defying weak results and moving higher

Shares of Tata Elxsi, Tata Technologies, and L&T Technology Services (LTTS) are trading higher despite all three companies reporting a subdued performance for the June quarter.Since the announcement of results, Tata Elxsi has risen 4%, Tata Technologies has gained 2%, and L&T Technology Services is up 1.5%.

CC Rev QOQ

The constant currency revenue declined sequentially across the board in the first quarter of FY26. For Tata Elxsi, CC revenue was down 3.9%, Tata Technologies fell 4.6%, and LTTS declined 4.2%.The market appears to be taking comfort in the management commentary and forward guidance, which point to a recovery in the coming quarters.

Tata Elxsi expects a steady improvement in profitability and margins as the year progresses. Its two largest verticals, transportation and media and communications, are expected to return to growth starting Q2 FY26.

Tata Technologies remains upbeat despite the Q1 miss, saying that the company is confident of avoiding a revenue decline in FY26. Management has signaled that Q2 will show improvement over Q1, with a strong second half expected. They aim to move margins towards 18% this fiscal and eventually reach the 20% mark, calling the current headwinds temporary and macro-driven.

LTTS, meanwhile, has reiterated its double-digit revenue growth guidance for FY26. The company expects a gradual improvement in margins, with EBIT trajectory in the second half likely to outperform the first.