Elgi Equipments (ELGIEQUIP) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 consolidated revenue grew 3% year-over-year to INR 8,476 Mn, with PBT and PAT slightly lower due to one-time costs and higher expenses; cash position improved significantly.

• Sales growth was achieved in most regions, led by India and Middle East, while North America’s industrial business performed well despite a sharp decline in the portable segment; Australia, US, and SE Asia remained subdued.

• New patented stabilizer technology for compressors was launched, promising significant energy savings and reliability improvements, with rollout in India imminent and global launch within six months.

• A new range of low-cost, high-reliability compressors to compete with Chinese imports will be launched in the next financial year, targeting a 6,000-7,000 unit annual market in India.

• Europe and Brazil returned to growth in Q3 FY25, while divestment of certain US joint ventures occurred in the previous quarter.

Financial highlights

• Q3 FY25 consolidated revenue: INR 8,476 Mn; standalone revenue: INR 4,978 Mn; consolidated PAT: INR 805.82 Mn; standalone PAT: INR 800.98 Mn.

• EBITDA for Q3 FY25 was INR 1,230 Mn, down from INR 1,306 Mn in Q3 FY24, with EBITDA margin at approximately 14.5%.

• EPS for Q3 FY25 was 2.55, down from 2.65 in Q3 FY24.

• Cash position improved to INR 3,627 Mn as of Dec 2024, up from INR 2,140 Mn in Mar 2024.

• Missed revenue of INR 15 crore in Q3 due to GST portal downtime, with sales rolling over to January.

Outlook and guidance

• Management expects Q4 to be strong, supported by year-end demand and non-recurring costs not expected to repeat.

• Europe is expected to break even at EBITDA level in the next financial year, with low double-digit growth possible.

• North America is expected to break even this year, with portable business now less than 10% of regional revenue.

• Domestic market growth is projected at 9-10% annually, with new products potentially adding 3-4% extra growth.

• Product innovation, such as the Stabilisor system, is expected to enhance operational efficiency and customer value.