Dear Stakeholders,
As I write this letter, I am pleased to see Tata Elxsi
surpass the milestone of Rs. 1,000 crores in Profit Before Taxes (PBT) during the FY
2023-24. Despite the volatilities faced by our client segments, your Company has reported
growth and profit, thanks to superior client relationships, and agile & flexible
operating model. During the financial year, your Company completed another key milestone
of integrating its design business into its offerings for the three key verticals. In the
FY 2023-24, more than 90% of revenues of IDV came from these three verticals. Tata Elxsi
now has seamless end-to-end offerings for ideation to market introduction of products, in
the verticals of Transportation, Media & Communication and Healthcare & Life
Sciences. This Research and Design-led capability enhances our competitive
differentiation, provides early visibility into end customer preferences, customer product
roadmaps and creates downstream development deals. During the FY 2023-24, the Company's
operating revenues stood at Rs. 3,552.1 crores, growing 13% year-on-year. Profit Before
Tax (PBT) stood at Rs. 1,048.7 crores. Your Company reported Profit After Tax (PAT) of Rs.
792.2 crores for the financial year.
During the financial year, Transportation business clocked
a revenue of Rs. 1,723.9 crores, growing 24.6% year-over-year. This revenue growth was
driven by Software Defined Vehicle (SDV) related engagements with leading OEMs across the
globe. Of this, 56% of the revenue came from OEMs. Your Company also won the German Design
Award 2024 for its work on automotive HMI, which underscores your Company's strong
capabilities in design-led offerings.
In the Healthcare & Life Sciences business, Tata Elxsi
revenue during the financial year grew by 10.8% to Rs. 484.9 crores, while it added five
marquee customers to its portfolio. The financial year also marked the opening of an
Offshore Development Centre (ODC) for Dr?ger, a leading German medical and safety
technology products manufacturer.
Revenue from our Media & Communication business,
reported at Rs. 1,217.5 crores remained protected during FY 2023-24, growing marginally by
0.2% year on year. During a challenging fiscal period for this business, your organisation
adeptly shifted its focus, resulting in a significant increase in revenue from operators,
which now represent 70% of the vertical's total business.
Investing in Our Future
I am delighted to share with you that while your Company
has been maintaining industry leading EBITDA margins during the last few years, it has
also been consistently investing to ensure its future growth in the coming years. In FY24
your Company added 1,535 net employees to its rolls, for sustained capacity building,
which was led by fresher intake. We also opened a global automotive design and engineering
centre in Pune, which has the capacity to house 1,000 engineers, designers and technology
specialists, along with R&D labs.
In the field of Artificial Intelligence (AI) and
Generative-AI (Gen-AI), your Company continues to invest in its people, labs and
solutions, and has rolled out specialised programs to get 25% of its engineers AI ready by
third quarter of FY25. Your organisation is at the forefront of integrating Gen-AI into
both design and software domains, leveraging this advanced technology to enhance workflows
and processes. This strategic application of Gen-AI positions its customers to achieve
success and gain a competitive edge in their respective markets. In the area of
sustainability, I am happy to share with you that we have reported a 54% reduction in
carbon intensity on turnover basis in 2023-24 as compared to the baseline year of 2019-20.
This is in line with our aspiration to be Carbon Neutral by 2030.
Looking Ahead
As we step into the new financial year, your Company is
well poised to leverage its Research and Design-Led engineering capabilities for growth
and profitability. Despite the uncertain macroeconomic situation that currently prevails
in the market, we are committed to engage with our clients to maximise our wallet-share
and participate in their optimisation and transformation spends.
In this journey, the dedication and commitment of our
researchers, designers and engineers is well appreciated, and I thank them, and the
management team for their hard work and their commitment to excellence, revenue growth and
profitability. I take this opportunity to welcome Mr. Soumitra Bhattacharya and Ms. Ashu
Suyash to our Board of Directors and thank them for their time, invaluable guidance and
insights.
Your Board of Directors has recommended a final dividend of
700%, or Rs. 70 per share, subject to taxation, for your consideration. I thank you, on
behalf of the Board of Directors and the management team, for your continued confidence,
and support.
Yours Sincerely,
N. G. Subramaniam