Automotive Equipment Maker Shares Rebound After Posting Disappointing Q3 Yesterday
The company's India and Middle East delivered sustainable growth, while Europe and Brazil saw a return to green this quarter. However, the management said the performance in the US, Australia, and South-East Asia markets remained subdued
Elgi Equipments Limited, a global leader in advanced compressed air systems, reported a mixed Q3 FY25 performance. The company faced a decline in profitability despite a modest sales increase. Following the earnings release, shares dropped over 4 per cent on February 11 but rebounded the next day with a 2.64 per cent intraday gain, closing at Rs 550.4. The stock remains down 19.19 per cent over the past year.
Elgi’s net profit for the December quarter fell 4 per cent year-on-year to Rs 80.58 crore from Rs 83.88 crore. This was despite a 3 per cent increase in revenue to Rs 847.59 crore compared to Rs 821.83 crore in Q3 FY24. The company's India and Middle East delivered sustainable growth, while Europe and Brazil saw a return to green this quarter. However, the management said the performance in the US, Australia, and South-East Asia markets remained subdued.
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Financial Performance Overview:
- Sales: Revenue for Q3 FY25 was Rs 847.59 crore, up 3 per cent from Rs 821.83 crore in Q3 FY24. Year-to-date sales reached Rs 2,517.5 crore, compared to Rs 2,351.8 crore last year.
- Profit Before Tax (PBT): PBT declined 5 per cent to Rs 110.6 crore from Rs 114.3 crore in Q3 FY24, reflecting weaker margins.
- EBITDA: EBITDA stood at Rs 123 crore, lower than the expected Rs 145.3 crore due to increased employee and operational expenses.
- Net Cash Position: Improved from Rs 214 crore in March 2024 to Rs 362.7 crore by December 2024.
The company's automotive garage equipment business performed in line with expectations. Additionally, Elgi Equipments introduced a new technology called "Stabilisor," aimed at stabilizing compressor operations, reducing pressure fluctuations, and improving efficiency. The company expects Q4 FY25 to perform better due to year-end demand.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.