Elgi Equipments (ELGIEQUIP) Q3 24/25 earnings summary

Executive summary

• Revenue for Q3 FY25 grew by 3% year-over-year, reaching INR 8,476 Mn, with consolidated sales at ₹8,475.88 million; North America saw industrial growth but a sharp decline in portables, while India and Middle East drove gains and Europe and Brazil returned to growth.

• EBITDA was impacted by a 15% increase in fixed costs and higher employee and other expenses, mainly due to one-time transport and warranty expenses.

• Cash position remains strong, with net cash improving to INR 3,627 Mn as of Dec 2024, supported by improved working capital and inventory management.

• Two major product developments: launch of a globally patented stabilizer technology for compressors and a new low-cost compressor range to compete with Chinese imports.

• India and Rest of World sales mix remained balanced, with India contributing 51% in Q3 FY25.

Financial highlights

• Q3 FY25 consolidated revenue was INR 8,476 Mn, up from INR 8,218 Mn in Q3 FY24; consolidated PAT for the quarter was ₹805.82 million, slightly down from ₹838.80 million in Q3 FY24.

• 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%.

• PAT for Q3 FY25 stood at INR 932 Mn, compared to INR 947 Mn in Q3 FY24; EPS for Q3 FY25 was 2.55, down from 2.65 in Q3 FY24.

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

• One-time expenses included INR 5 crore in transport and INR 2 crore in warranty provisioning.

Outlook and guidance

• Confident of a strong Q4 performance, supported by typical year-end demand and continued cash position improvement.

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

• Expecting Europe to break even at EBITDA level in FY26, with low double-digit growth possible.

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