Elgi Equipments (ELGIEQUIP)

FairStock Score: 52/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Elgi Equipments as a Graham-style value investor. The business quality looks respectable: ROE 21.67%, ROCE 21.91%, debt/equity only 0.24, and Piotroski F-Score 8/9. That combination tells me management is earning high returns on capital without leaning heavily on borrowings. Altman Z-Score 5.81 also suggests a safely financed enterprise, and 5-year revenue CAGR of 13.92% shows it has grown steadily. Latest quarter sales ₹1,003 Cr and net profit ₹95 Cr are healthy, while free cash flow ₹108 Cr is positive. However, I must distinguish sales growth from profit growth: sales grew 26.70%, but profit grew only 10.92%, so incremental revenue may not be converting into profit proportionately. Valuation is the problem. At ₹609.50, P/E 42.92, P/B 8.61, PEG 4.14, and dividend yield 0.47%, the market is paying a premium. Graham Number ₹129.95 and DCF intrinsic value ₹182.44 imply margin of safety of -311.49%, meaning the price is far above my conservative intrinsic estimates. FairStock Score 52/100 (MIXED) supports caution. Promoter holding 31.19% is moderate. While the industrial compressor franchise may have a moat through brand and distribution, I cannot identify a sufficient price discount. A wonderful business can be a poor investment if bought too dear. I would put ELGIEQUIP on a watchlist as a quality stalwart, monitor cash flow conversion and profit growth, and wait for a much wider margin of safety.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer