Elgi's margin improves year on year but slips 1.04 points sequentially
Revenue rose 22.56% year on year, but costs declined more slowly than sales sequentially and other income remained material to pre-tax profit.
Filed 13 Aug 2026, 17:19 IST · after market close · Elgi Equipments Ltd (ELGIEQUIP)
Key takeaways
- Consolidated revenue grew 22.56% year on year, while operating margin improved 0.65 percentage points to 14.62%.
- Sequentially, revenue fell 4.53% and costs declined only 3.36%, narrowing operating margin by 1.04 percentage points.
- Other income contributed 10.68% of pre-tax profit, while the sequential tax-rate increase of 4.09 percentage points limited profit conversion.
Price around the results
Year-on-year growth holds, but quarterly momentum cools
Elgi Equipments reported consolidated revenue of Rs 1,062.2 cr, up 22.56% year on year, with operating profit growth of 28.24% as expenses rose 21.63%. Sequentially, revenue declined 4.53% and operating profit fell 10.85%, reflecting a softer quarter after Q4FY26. Net profit rose 20.68% year on year to Rs 103.3 cr but declined 19.3% sequentially.
Sequential cost growth pressured the operating margin
The sequential margin decline of 1.04 percentage points followed expenses falling 3.36%, slower than the 4.53% revenue decline. Year on year, expenses grew more slowly than revenue, allowing operating margin to improve 0.65 percentage points. The 14.62% margin was 0.20 percentage points above the 14.42% median for 138 Industrials peers that had reported.
Tax and other income shaped profit quality
Other income accounted for 10.68% of pre-tax profit, so reported earnings were not driven by operating profit alone. The sequential tax rate increased 4.09 percentage points, while the year-on-year tax rate fell 1.32 percentage points and supported net-profit growth. Interest expense declined 17.81% year on year, partly offsetting the 31.38% rise in depreciation.
Margin remains above last year's level after Q4 peak
Operating margin improved from 13.97% in Q1FY26 to 14.45% in Q2FY26, slipped to 14.34% in Q3FY26, rose to 15.66% in Q4FY26, and then eased to 14.62% in Q1FY27. The latest quarter therefore marks a sequential reversal from the Q4 peak, but remains above the year-ago margin. The results were filed after market close, so there is no current market reaction to assess; after the previous eight results, the stock fell six times and rose twice, with a median absolute move of 2.82%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,062 cr | ₹1,113 cr | -4.53% | +22.56% |
| Other income | ₹15 cr | ₹21 cr | -28.02% | -34.36% |
| Expenses | ₹907 cr | ₹938 cr | -3.36% | +21.63% |
| Operating profit | ₹155 cr | ₹174 cr | -10.85% | +28.24% |
| Operating margin (%) | 14.62% | 15.66% | — | — |
| Interest | ₹6 cr | ₹6 cr | -1.64% | -17.81% |
| Depreciation | ₹25 cr | ₹25 cr | -1.20% | +31.38% |
| Profit before tax | ₹140 cr | ₹164 cr | -14.84% | +18.52% |
| Tax | ₹36 cr | ₹36 cr | +1.12% | +12.77% |
| Net profit | ₹103 cr | ₹128 cr | -19.30% | +20.68% |
| EPS (₹) | ₹3.28 | ₹4.06 | -19.21% | +21.03% |
Operating margin of 14.62% compares with a Industrials sector median of 14.42% across 138 peers that have reported Q1FY27.
What to watch
- Whether revenue rebuilds from Rs 1,062.2 cr after the 4.53% sequential decline.
- Whether operating margin holds above 14.62% after the 1.04-percentage-point sequential drop.
- Whether other income remains near 10.68% of pre-tax profit and the tax rate moves below 25.95%.