Hold Elgi Equipments; target of Rs 520: ICICI Direct

ICICI Direct's research report on Elgi Equipments

Elgi Equipments (Elgi) manufactures a wide range of air compressors (~92% of revenue) and automotive equipment (~8%). Elgi is the second largest player in the Indian air compressor market (~22% market share) and among the top eight players globally • Expansion in new international markets to drive long term incremental growth (rest of the world contributed ~50% in FY22).

Outlook

We remain long term positive on the stock but rich valuations cap upside. Hence, we maintain HOLD rating. We value Elgi at Rs 520 i.e. 50x P/E on average EPS for FY24E and FY25E.