Elgi Equipments share price gained over a percent in the early trade on Tuesday after the company posted strong earnings for the quarter ending March 2023. The stock had jumped over 18% in the previous session.
Elgi Equipments stock is just tad below its 52-week high of ₹566.50 apiece, hit on September 07, 2022. It touched a 52-week low of ₹316.15 apiece on May 25, 2022.
The shares have jumped 68% in the last one year and has registered a robust rally of over 751% in three years.
The air compressor manufacturer reported consolidated net profit of ₹170.1 crore in Q4FY23, registering a staggering 133% year-on-year growth.
The consolidated net profit for the financial year 2022-2023 was ₹370.81 crore as compared to ₹178.43 crore in FY 2021-22.
The PAT for the quarter and the year includes profit on sale of property held by the subsidiary, Pattons Inc., USA, amounting to ₹77.45 crore, the company said.
The company’s revenue from operations increased 14.86% YoY to ₹835.7 crore.
“North America and Europe performed better than anticipated. The rest of the regions were better than the previous year. The automotive business has performed well to register growth in sales and profitability,” Elgi Equipments said in a regulatory filing.
The board of the company has recommended a dividend of ₹2 per share (200%) for the year 2022-23.
“We remain cautiously optimistic to achieve our FY’24 revenue targets. Predicted economic slowdown by experts in certain markets and wars could act as a dampener,” it added.
ICICI Direct remains long term positive on the stock and has maintained its ‘Buy” rating with a target price of ₹565 per share, i.e. 45x P/E on FY24EPS.
The brokerage expects the company to report strong revenue CAGR of 16% in FY23-25 led by air compressor business with new customer addition and higher margins orders with strong balance sheet.
“Going forward, accelerated growth in international markets, new products like disrupted AB series compressors, good traction in India business to drive long term incremental growth. We expect revenue, EBITDA to grow at CAGR of 17.5%, 19.6%, respectively, in FY23-25E owing to various cost control initiatives improving margins,” ICICI Direct said.
It believes net debt free balance sheet, double-digit return ratios and strong cash generation are key triggers for future price performance.
At 10:20 am, the shares of Elgi Equipments were trading 0.31% lower at ₹555.70 apiece on the BSE.