Elgi Equipments (ELEQ IN) – Q3FY26 Result Update – Decent Q3; tariff reduction to aid exports revival – Accumulate
Published on 12 Feb 2026
Elgi Equipments (ELEQ) reported a decent quarter with revenue growth of 18.4% YoY and a 25 bps YoY expansion in EBITDA margin. Robust volume-led growth across industrial segments supported strong domestic performance, while exports benefited from improved traction in Australia and the US, partly offset by subdued demand in Europe. Ongoing restructuring initiatives, largely focused on Europe, led to elevated operating expenses during the quarter; however, the recently signed India-EU FTA is expected to support a gradual recovery in the European business. Additionally, lower reciprocal tariffs in the US, coupled with recent price increases, are likely to aid margin expansion in medium term in the US business and support overall export growth. The company’s new product, ‘Demand=Match’ is seeing encouraging traction, while the low-cost screw compressor aimed at competing with Chinese imports is expected to be launched by Q2FY26. The stock is currently trading at a PE of 34.1x/29.7x on FY27/28E. We maintain our ‘Accumulate’ rating on the stock valuing it at a PE of 35x Sep’27E (same as earlier) arriving at a TP of Rs565 (Rs561 earlier).
