Elgi Equipments Reports Mixed Q2 Results: Sales Up, EBITDA Margin Down

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

Metric	Q2 Current	Q2 Previous	Change
Sales Growth	11.00%	-	-
EBITDA Margin	14.90%	16.30%	-1.40%
Employee Costs	+15.00%	-	-
Strategic Initiatives Cost	1.20% of EBITDA	-	-

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:

A 15% increase in employee costs, which put pressure on the company's operational expenses.
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:

A low-cost compressor range, which could help capture a broader market segment.
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.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.07%	+2.59%	+8.13%	+4.61%	-9.36%	+298.22%

Elgi Equipments Limited , a prominent air compressor manufacturer, has announced its financial results for the second quarter of the fiscal year 2025-26, showcasing robust growth across key metrics.

Financial Highlights

Metric	Q2 2025-26	Q2 2024-25	YoY Growth
Consolidated Sales	Rs. 968.00 crores	Rs. 869.00 crores	11%
Standalone Sales	Rs. 568.00 crores	Rs. 531.00 crores	7%
Consolidated PAT	Rs. 121.00 crores	Rs. 95.00 crores	27%
Standalone PAT	Rs. 91.00 crores	Rs. 98.00 crores	-7%

Market Performance

The company reported continued growth momentum across various markets:

India, Middle Eastern, and South American markets showed strong performance.
USA and Australia achieved double-digit growth.
European performance remained subdued due to economic headwinds.
The automotive business met growth expectations compared to the same period in 2024-25.

Outlook for Q3 2025-26

Elgi Equipments expects to maintain similar growth levels in the third quarter as observed in the second quarter. However, this projection is subject to the resolution and stabilization of import tariffs between the USA and India.

Detailed Financial Analysis

The unaudited consolidated financial results provide further insights into the company's performance:

Total income for Q2 2025-26 stood at Rs. 10,194.00 million, compared to Rs. 8,830.00 million in Q2 2024-25.
Profit before tax increased to Rs. 1,670.00 million in Q2 2025-26 from Rs. 1,307.00 million in the same quarter last year.
Basic earnings per share (EPS) rose to Rs. 3.85 in Q2 2025-26, up from Rs. 2.99 in Q2 2024-25.

Balance Sheet Highlights

As of September 30, 2025:

Total assets stood at Rs. 22,118.00 million, up from Rs. 20,838.00 million as of March 31, 2025.
Total equity increased to Rs. 18,342.00 million from Rs. 17,265.00 million at the end of the previous fiscal year.

Management Commentary

Jairam Varadaraj, Managing Director of Elgi Equipments Limited, stated, "Our company has demonstrated good growth led by international regions when compared to the same period last year. We are particularly pleased with the double-digit growth achieved in the USA and Australia, which has contributed significantly to our overall performance."

The company's board of directors approved these results at a meeting held on November 12, 2025. The statutory auditors, Price Waterhouse Chartered Accountants LLP, have carried out a limited review of the financial results for the quarter and half-year ended September 30, 2025.

Investors and stakeholders should note that while the company has shown strong growth, future performance may be influenced by factors such as global economic conditions and trade policies, particularly concerning import tariffs between the USA and India.