Elgi Equipments (ELGIEQUIP) Q2 25/26 earnings summary

Executive summary

• Revenue for Q2 FY26 increased by 11% year-over-year to INR 9,680 Mn, with all regions except Europe showing growth; Europe remained muted but cost actions are underway.

• EBITDA margin was 14.9% of revenue, down from 16.3% last year, mainly due to increased employee costs and special initiatives; sequentially improved from 14.0% in Q1 FY26.

• PBT grew 28% year-over-year to INR 1,670 Mn, driven by a one-off gain from a property sale in the U.S.; excluding this, PBT is flat.

• PAT for the quarter was INR 1,214 Mn, with a PAT margin of 12.5%.

• Cash position improved due to better receivables and inventory management, with net cash at INR 5,316 Mn as of Sep 2025.

Financial highlights

• Sales mix between compressors and automotive remained stable, with compressors at 91% and automotive at 9% in Q2 FY26.

• India contributed 52% to compressor sales, rest of world 48%.

• Net cash position improved, though currency depreciation affected reported values.

• Gross margin was around 51.9%, slightly lower than last year, attributed to product mix.

• Basic EPS for Q2 FY26 was 3.85, up from 2.99 in Q2 FY25.

Outlook and guidance

• Optimism for continued cash position improvement and stronger Q3 performance, especially in India and North America.

• Europe expected to remain flat in the second half, with cost reductions to benefit future profitability.

• Tariff impacts in the U.S. are mitigated; if tariffs drop, profitability will improve further.

• No new EBITDA or revenue guidance provided; updated guidance expected in future calls.

• Management indicates continued focus on operational efficiency and cost control.