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Elgi reports strong Q2FY22 Performance

News: Elgi Equipments reported strong revenue growth for Q2FY22 with decent margins amid higher input costs amid challenges. Consolidated revenue grew by 35.8% YoY to Rs.652 crore vs. I-direct estimate of Rs.557 crore. EBITDA margins came in at 12.3% in Q2FY22 (above our estimates of 9.0%) despite higher commodity prices, operating costs amid challenges. PAT came in at Rs.51.6 crore, up 55.2% on YoY partly aided by higher other income and lower effective tax rate.

Views: Elgi Equipment registered strong topline growth aided by incremental growth in key international markets while domestic markets witnessing continued improvement in performance. Also, ATS business registered strong comeback and expected to further improve gradually in the long run. Overall, strong operating performance offsetting higher input cost. Going ahead, further traction in international market, new products would aid long term growth.