01 — Opening Hook
The Great Tariff Lottery Winner (Who Lost Anyway)
ELGI Equipments just became the first Indian compressor maker to cross ₹1,000 crore in quarterly revenue. That’s headline-grabbing stuff. Problem is: they’re celebrating crossing a finish line while still bleeding inventory from a 50% US tariff that killed their Q2. Now the tariff dropped to 18% (maybe). They’re holding ₹6 months of expensive inventory. Margins are bruised. And Europe—their second-largest market—is basically a zombie that needs cost surgery.
But here’s what matters: Management navigated the tariff crisis like a CFO who actually knows how to do math. They raised prices in America, insourced motors in India, and somehow stayed profitable. The question isn’t whether they’ll survive. It’s whether they can convince investors they deserve a 37x P/E when their European operations look like a patient on life support.
Read on: ELGI bullied tariffs, mastered inventory management, and still managed to sound apologetic about margin pressure. The unspoken subtext: “Please stop asking about Europe.”
02 — At a Glance
The Numbers Game
Q3 Revenue
₹1,003 Cr
+18% YoY. Finally broke the ₹1K barrier. Investors applauded. Then inventory numbers came out.
EBITDA Margin
14%
Down 100 bps vs prior quarter. Tariff hit = 1%. Employee cost spike = 2-3%. Math doesn’t lie.
PAT
₹106 Cr
+31% YoY. Profit grew faster than revenue. That’s the tariff mitigation tax cut working.
TTM Earnings
₹404 Cr
EPS: ₹12.75. P/E: 37.2x. Not exactly a bargain after a 3-year 22% CAGR rally.
ROCE / ROE
22% / 20%
Sector is cooking. But leverage at 0.26 D/E keeps returns under control. Clean balance sheet energy.
The Reality Check: Revenue momentum is real. Margins are real. But inventory is also real—6 months worth. Management expects it to clear by Q2 FY27. Translation: Q4 and Q1 earnings will be noise.
03 — Management’s Key Commentary
What They Said (And What Was Left Unsaid)
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