Why have the shares of Elgi Equipment rallied so sharply in the recent past?

Elgi Equipments has rallied by a whopping 54% in the last five weeks to touch a price level of Rs397 on the stock exchange. This is at a time when the markets overall were deep in the red with a correction of 3%. Elgi is a predominant manufacturer of air compressors with a small exposure to automotive equipment. It has 22% market share in air compressors. The spike in price came after a smart performance in Q4FY22.

For the period, Elgi reporting 68% yoy jump in net profits at Rs73.1 crore. Sales revenues for the quarter was also up 19% at Rs728 crore. Above all, the EBITDA margins improved from 12.97% to 14.60% on yoy basis. Much of the outperformance was driven by the air compressor sector.