Elgi's margin reaches a five-quarter high as revenue growth outpaces costs
Operating profit grew 32.24% year on year, but lower other income limited net profit growth to 5.68%; the stock's 1.44% rise was below its usual reaction.
Filed 06 Nov 2026, 12:14 IST · Elgi Equipments Ltd (ELGIEQUIP)
Key takeaways
- Consolidated operating margin widened 1.86 percentage points year on year as revenue grew 17.18% while expenses grew 14.64%.
- Operating profit rose 32.24% year on year, but net profit increased only 5.68% as other income fell 65.15% and still contributed 11.01% of pre-tax profit.
- The stock gained 1.44% on results day, a smaller move than its 2.96% median absolute reaction across the past eight results.
Price around the results
Revenue growth widened the operating spread
Consolidated revenue grew 17.18% year on year, while expenses grew 14.64%, lifting operating profit growth to 32.24%. The same pattern held sequentially: revenue rose 6.79% and expenses 4.68%, widening operating margin by 1.69 percentage points. Management said Q2FY27 sales grew 17% year on year.
Tariffs and product mix still pressured contribution
Management said contribution was affected by cost increases, tariffs and product mix. It also reported a Rs 26 Mn, or 1%, increase in employee cost and a Rs 159 Mn, or 10%, rise in other expenses. Lower interest expense helped, falling 30.00% year on year, but depreciation increased 24.64%.
Margin recovered after the Q1FY27 dip
Operating margin rose to 16.31% from 14.62% in Q1FY27 and 14.45% a year earlier, reaching the highest level in the five-quarter trend shown. It remains 4.81 percentage points above the 11.50% median for 197 Industrials peers that have reported the quarter. Net profit growth was restrained by the 65.15% fall in other income; the tax rate also declined 1.30 percentage points year on year.
Results-day gain was modest by Elgi's history
The stock rose 1.44% on the results date despite opening with a 0.04% gap down, while volume was 11.46 times the reference level. Across the past eight results, it rose after three and fell after five, with a median absolute move of 2.96%, making this reaction smaller than its typical move.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,134 cr | ₹1,062 cr | +6.79% | +17.18% |
| Other income | ₹19 cr | ₹15 cr | +28.19% | -65.15% |
| Expenses | ₹949 cr | ₹907 cr | +4.68% | +14.64% |
| Operating profit | ₹185 cr | ₹155 cr | +19.12% | +32.24% |
| Operating margin (%) | 16.31% | 14.62% | — | — |
| Interest | ₹5 cr | ₹6 cr | -18.33% | -30.00% |
| Depreciation | ₹26 cr | ₹25 cr | +4.45% | +24.64% |
| Profit before tax | ₹173 cr | ₹140 cr | +24.30% | +3.83% |
| Tax | ₹45 cr | ₹36 cr | +24.59% | -1.10% |
| Net profit | ₹128 cr | ₹103 cr | +24.20% | +5.68% |
| EPS (₹) | ₹4.07 | ₹3.28 | +24.09% | +5.71% |
Operating margin of 16.31% compares with a Industrials sector median of 11.50% across 197 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.44% | -0.57% |
Volume on the results session was 11.46× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Sales grew by 17% in Q2 FY27 versus Q2 FY26.
Problems & risks
- Contribution was impacted by cost increases, tariffs and product mix.
- Employee cost increased by INR 26 Mn, or 1%.
- Other expenses increased by INR 159 Mn, or 10%.
What to watch
- Whether operating margin holds above 16.31% after tariff and product-mix pressure.
- Whether expense growth stays below revenue growth after the year-on-year gap of 14.64% versus 17.18%.
- The share of other income in pre-tax profit versus 11.01% this quarter.