Elgi's profit rises 25.49% as operating margin recovers to 15.66%
Revenue grew faster than expenses year on year, while a 5.44-percentage-point tax-rate reduction also lifted profit; other income contributed 12.64% of pre-tax profit.
Filed 27 May 2026, 17:59 IST · after market close · Elgi Equipments Ltd (ELGIEQUIP)
Key takeaways
- Consolidated net profit rose 25.49% year on year to Rs 128.0 cr, helped by a lower tax rate and operating profit growth of 16.21%.
- Operating margin expanded 0.56 percentage points year on year to 15.66% because revenue grew faster than expenses.
- The stock's initial -0.77% reaction was milder than its historical median absolute move of 2.96%, despite a 17.08x volume spike.
Price around the results
Revenue growth outpaced expenses in Q4FY26
Consolidated revenue grew 12.06% year on year and 10.88% sequentially, while expenses rose 11.32% and 9.18%, respectively. That operating leverage lifted operating profit by 16.21% year on year and 21.06% quarter on quarter. The results were filed after market close.
Margin recovery came with a tax-rate boost
Operating margin widened 0.56 percentage points year on year and 1.32 percentage points sequentially because costs grew more slowly than revenue. Net profit growth was also aided by the tax rate falling 5.44 percentage points year on year and 4.28 percentage points sequentially. Other income accounted for 12.64% of pre-tax profit, so reported earnings included a material non-operating contribution; interest expense fell 22.78% year on year but rose 22.0% sequentially.
Margin recovered after a three-quarter soft patch
The 15.66% operating margin was up from 14.34% in Q3FY26, reversing the decline from 15.10% in Q4FY25 to 13.97% in Q1FY26. Elgi's margin matched the 15.66% median for the 71 Industrials peers that had reported the same quarter. This puts the quarter's improvement in context: it was a recovery from the recent trough, not a new high against the sector.
Market reaction was within Elgi's usual range
The stock fell 0.77% initially, then gained 5.61% after five sessions and was down 0.81% after 30 sessions. That response was less volatile than the company's recent history, in which six of eight result reactions were down and the median absolute move was 2.96%. The initial session also saw volume at 17.08 times the reference level.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,113 cr | ₹1,003 cr | +10.88% | +12.06% |
| Other income | ₹21 cr | ₹11 cr | +83.19% | +16.29% |
| Expenses | ₹938 cr | ₹860 cr | +9.18% | +11.32% |
| Operating profit | ₹174 cr | ₹144 cr | +21.06% | +16.21% |
| Operating margin (%) | 15.66% | 14.34% | — | — |
| Interest | ₹6 cr | ₹5 cr | +22.00% | -22.78% |
| Depreciation | ₹25 cr | ₹21 cr | +17.37% | +28.21% |
| Profit before tax | ₹164 cr | ₹129 cr | +27.08% | +16.75% |
| Tax | ₹36 cr | ₹34 cr | +6.23% | -6.53% |
| Net profit | ₹128 cr | ₹95 cr | +34.45% | +25.49% |
| EPS (₹) | ₹4.06 | ₹3.01 | +34.88% | +25.70% |
Operating margin of 15.66% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.77% | +0.73% |
| Next session | +0.41% | — |
| 5 sessions | +5.61% | +7.87% |
| 15 sessions | +6.03% | — |
| 30 sessions | -0.81% | — |
Volume on the results session was 17.08× its 20-day average.
What to watch
- Whether operating margin holds above 15.66% after the Q4FY26 recovery.
- Whether the tax rate stays near 21.86% rather than returning to 26.14% recorded in Q3FY26.
- Whether other income remains a material contributor after accounting for 12.64% of pre-tax profit.