ICICI Direct: Elgi Equipments’ Domestic Business Continues To Underperform

ICICI Direct Report

Elgi Equipments Ltd. reported a muted Q1 FY21 performance with consolidated revenue down 38.7% YoY to Rs 286.1 crore versus our estimate of Rs 306.0 crore.

Standalone revenue (domestic, direct exports compressor) de-grew 57.1% YoY to Rs 119.3 crore (approximately 42% of consolidated topline).

The international compressor business grew 2.6% YoY (contributing approximately 51% to consolidated topline). Automotive segment revenue declined 56.9% YoY (approximately 7% of topline).

Consequently, absolute Ebitda declined 78.9% YoY to Rs 8.7 crore versus our estimate of Rs 15.6 crore primarily due to lower revenue booking and relatively higher operating expenses amid economic disruptions due to Covid-19.

It received approximately Rs 14 crore in Q1 FY21 towards subsidy programmes for employee retention. Loss after tax was at Rs 8.7 crore (versus profit after tax of Rs 17 crore in Q1 FY20).

Profitability margins were impacted further by increase in depreciation by 15.2% YoY to Rs 17.5 crore, increase in interest cost and taxes.

Elgi Equipment’s board has considered and recommended issue of bonus shares in proportion of 1:1 subject to necessary approvals.

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