Mitsubishi UFJ Financial Group (MUFG) has significantly reduced its indirect stake in Elgi Equipments , an Indian company, through a strategic divestment of its subsidiaries. This move marks a notable shift in MUFG's investment portfolio in the Indian market.

Key Details of the Transaction

Transaction Highlights

• Date of Sale: November 25, 2025
• Entities Sold: First Sentier Investors (Hong Kong) Limited and First Sentier Investors (Singapore)
• Mode of Sale: Indirect sale through divestment of subsidiaries

The transaction involved the sale of 1,380,405 shares, reducing MUFG's total shareholding from 8,055,055 to 6,674,650 shares. This reduction brings MUFG's stake below the 5% threshold, which often has implications for regulatory reporting and influence over company decisions.

Implications and Context

This divestment by MUFG, a major global financial group, could signal a shift in its investment strategy in the Indian market or a reallocation of its portfolio. For Elgi Equipments, this change in ownership structure might lead to potential changes in investor relations and possibly in strategic direction, depending on the nature of MUFG's previous involvement.

Investors and market analysts may watch closely to see if this move is part of a larger trend of foreign institutional investors adjusting their positions in the Indian market, or if it's specific to MUFG's strategy for Elgi Equipments.

As per regulatory requirements, MUFG has informed the stock exchanges - BSE Limited and National Stock Exchange of India Ltd - about this change in shareholding, ensuring transparency in the market.

For Elgi Equipments shareholders, while this transaction doesn't directly impact the company's operations, it represents a significant change in the company's ownership landscape.

Elgi Equipments , a prominent player in the industrial equipment sector, has released its financial results for the second quarter, revealing a mixed performance with notable sales growth but a decline in EBITDA margin.

Key Financial Highlights

Sales Growth and Operational Challenges

Elgi Equipments demonstrated robust top-line performance with an 11% increase in sales compared to the same quarter last year. This growth indicates strong demand for the company's products and services in the industrial equipment market.

However, the company faced operational challenges that impacted its profitability. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin decreased to 14.90%, down from 16.30% in the previous year. This decline in EBITDA margin can be attributed to two main factors:

1. A 15% increase in employee costs, which put pressure on the company's operational expenses.
2. Strategic initiatives that consumed approximately 1.20% of EBITDA, indicating significant investments in future growth and development.

Mitigating US Tariff Impact

Elgi Equipments reported that it expects no impact from US tariffs at the consolidated level. The company has implemented cost mitigation measures to offset potential tariff-related expenses, demonstrating proactive management of international trade challenges.

European Operations and Product Development

The company is actively addressing challenges in its European operations by implementing cost reduction strategies. This move is likely aimed at improving profitability in the region and strengthening the company's global competitive position.

Additionally, Elgi Equipments is preparing to launch two significant product offerings:

1. A low-cost compressor range, which could help capture a broader market segment.
2. The DemandMatch product for new machines, potentially offering enhanced efficiency and performance to customers.

These product developments indicate the company's commitment to innovation and market expansion, which could drive future growth.

Investor Communication

Elgi Equipments held its Q2 earnings conference call for analysts and investors on November 13. The company has made the transcript of this call available on its website, demonstrating transparency and commitment to keeping stakeholders informed.

Conclusion

Elgi Equipments' Q2 results present a picture of a company navigating growth opportunities while managing operational challenges. The strong sales growth is encouraging, but the pressure on EBITDA margins highlights the need for continued focus on operational efficiency. The company's proactive approach to US tariffs, European operations, and new product development suggests a strategic focus on long-term competitiveness and growth in the global industrial equipment market.