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Research
Q3FY21 Result Update - Elgi Equipments - ICICI Direct
Posted On : 2021-02-15 14:09:25( TIMEZONE : IST )
Elgi Equipments (Elgi) reported a strong Q3FY21 with consolidated revenue up 18.1% YoY to Rs. 547.1 crore vs. I-direct estimate of Rs. 505.4 crore. Standalone revenue (domestic & direct exports compressor) grew 14.2% YoY to Rs. 323.0 crore (~59% of consolidated topline) while the international compressor business registered robust growth of 26.3% YoY (contributing ~32% of consolidated topline). Automotive segment revenue fell 23.8% YoY (~9% of topline). EBITDA margins improved significantly by 420 bps YoY to 11.2% in Q3FY21 (vs. our estimate of 13.5%) primarily due to better revenue booking and reduction in operating expenses as business operations and demand sustained in key geographies. Hence, absolute EBITDA grew 32.3% to Rs. 61.5 crore YoY (vs. our estimates of Rs. 68.2 crore). PAT came in at Rs. 34.6 crore, up 169%, YoY partly aided by lower effective tax rate. However, other income fell 12.1% to Rs. 6.7 crore YoY.
Valuation & Outlook
Going ahead, further traction in international market, new products like oil free compressors (AB series) would aid growth while green shoots of revival visible in India business would further aid topline. Also, its strategy on cost reduction and focus on operating cash business would help deal with working capital, debt reduction and liquidity situation. We expect revenue, EBITDA CAGR of 12.3%, 34.9%, respectively, in FY20-23E backed by international growth and positive operating leverage. We revise our target price to Rs. 210 (earlier Rs. 190), 35x FY23 EPS of Rs. 6.0 and maintain BUY rating.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ElgiEquipments_Q3FY21.pdf
Shares of ELGI EQUIPMENTS LTD. was last trading in BSE at Rs.168.4 as compared to the previous close of Rs. 166.9. The total number of shares traded during the day was 2945 in over 80 trades.
The stock hit an intraday high of Rs. 170.15 and intraday low of 166.3. The net turnover during the day was Rs. 495290.
