1. At a Glance – Blink and You’ll Miss the Punch
Ellenbarrie Industrial Gases Ltd just walked out of its Q3 FY26 results looking like that quiet topper who never flexes but tops the class anyway. Market cap around ₹3,700 crore, stock chilling near ₹262 after a brutal post-IPO reality check, and suddenly—bam—Q3 numbers drop with ₹813.46 million revenue and ₹260.87 million PAT. That’s not a typo. Operating margins hovering north of 33%, ROCE flirting with 18%, and debt-to-equity down at a polite 0.13.
Three-month return? A painful negative. Six-month return? Even worse. But fundamentals? Calm, industrial, oxygen-filled confidence. This is not a meme stock. This is a molecule-by-molecule compounding story trying to survive public markets’ mood swings.
Question for you before we begin: is the market over-punishing boring businesses, or under-estimating silent cash machines?
2. Introduction – From Cylinders to Cash Flow
Industrial gases is the kind of business nobody brags about at parties. No one says, “Bro, I’m into oxygen.” Yet steel plants stop without it, hospitals panic without it, and defence literally can’t function without it. Ellenbarrie has been doing this unsexy but critical job for over 50 years.
Post IPO, expectations were sky-high, price was higher, and gravity did what gravity does. The stock corrected hard. But beneath the bruised chart lies a company expanding capacity, commissioning plants, locking long-term offtake agreements, and quietly cleaning up its balance sheet.
Q3 FY26 is important because it confirms one thing: margins are not a COVID one-hit wonder. This is a structurally high-margin, asset-heavy, repeat-customer business.
So the real question isn’t “why is the stock down?”
It’s “why is the business still executing?”
3. Business Model – WTF Do They Even Do?
Ellenbarrie sells air. Literally. But in a very expensive, engineered, mission-critical way.
They separate oxygen, nitrogen, argon, and friends using massive Air
Separation Units (ASUs), then supply them in three formats:
• Bulk via cryogenic tankers
• Packaged cylinders
• Onsite pipeline plants at customer locations
Oxygen (48%) and nitrogen (37%) do most of the heavy lifting. Steel, pharma, chemicals, hospitals, railways, defence—everyone keeps coming back. In FY24, 92% of revenue came from repeat customers. That’s not loyalty, that’s addiction.
Add project engineering on top—setting up ASUs, PSA plants, hospital gas pipelines—and you get a capital goods flavour layered over annuity gas sales.
Simple model. High switching costs. Long contracts. Logistics moat. Not sexy—but deadly effective.
Lazy investor question: if customers don’t leave and volumes keep growing, why should margins collapse?
4. Financials Overview – The Numbers Speak (Loudly)
Figures in ₹ crore.
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 81.35 | 68.00 | 89.00 | 19.6% | -8.6% |
| EBITDA | 27.00 | 19.00 | 33.00 | 42.1% | -18.2% |
| PAT | 26.09 | 19.20 | 37.00 | 35.9% | -29.5% |
| EPS (₹) | 1.85 | 1.47 | 2.61 | 25.9% | -29.1% |
Annualised EPS (Q3 rule):
Average of Q1, Q2, Q3 EPS × 4
= (1.33 + 2.61 + 1.85) / 3 × 4 ≈ ₹7.18
Commentary:
Yes, QoQ dipped because Q2 was unusually strong. No, margins didn’t collapse. Yes, other income exists—but core operating profit is still doing the heavy lifting.
Do you panic over one quarter, or zoom out over a decade?
5. Valuation Discussion – Fair
