ICICI Direct has given Buy recommendation for Elgi Equipments with a target price of Rs. 210 in its research report issued on Feb 10, 2021

ICICI Direct’s research report on Elgi Equipments

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.

Outlook

We revise our target price to Rs 210 (earlier Rs 190), 35x FY23 EPS of Rs 6.0 and maintain BUY rating

For all recommendations report, click here

Leave a Reply

Your email address will not be published. Required fields are marked *