Multibagger midcap stock rises 672% on D-Street in 3 years. Should you buy more?
Elgi Equipments, a leading air compressor manufacturer, outperformed benchmarks on Wednesday and gained by nearly 8% on Dalal Street. In its Midcap medallion report, Religare Broking has given a ‘Buy’ recommendation for a target price of ₹530 per share. The outlook for the target price in Elgi is set for 21 days. Elgi is a multibagger stock and has recorded triple-digit upside in percentage terms in post-Covid level.
In its report, the brokerage said, “Elgi Equipments has been trading in a steady long-term uptrend since 2009, with intermediate phases of corrective move.”
It added, “After the last leg of up move, it oscillated in a broader range i.e. 360-560 in the last seven months and witnessed breakout from the same now.”
Further, the brokerage added, “the base formation above the major moving averages before the breakout adding to the positivity. We thus recommend creating fresh longs in the mentioned zone.”
Religare Broking has set a target price of ₹530 on Elgi Equipments on Wednesday with a stop loss of ₹465 per piece. The buying can be in the range of ₹490 to ₹494 per share.
The brokerage’s target price for Elgi is seen in a period of 21 days.
On Wednesday, on BSE, Elgi’s share price closed at ₹507.10 apiece up by ₹31.05 or 6.52%. Overall, the stock has advanced by nearly 8% with an intraday high of ₹514 apiece.
As of April 19, Elgi’s market cap is around ₹16,070 crore.
Year-to-date, Elgi’s stock price has gained by nearly 1%. In a year, the stock has risen by nearly 66% compared to the price level of ₹305.55 apiece on April 19, 2022, on BSE.
In post-Covid, in 3 years, the stock has witnessed over a whopping 672% upside on BSE. The stock was merely below ₹67 apiece on April 20, 2020.
Elgi Equipments is a leading air compressor manufacturer with an extensive range of innovative and technologically advanced compressed air solutions.
Last month, Elgi’s wholly-owned subsidiary Elgi Compressors USA acquired 33.33% of the share capital of CS Industrial Services LLC. CS Industrial Services will act as an exclusive dealer/distributor for Elgi Compressors USA Inc, for the sale of ELGi branded compressors in the Western New York region.
In Q3FY23, the company’s consolidated PAT was at ₹80.1 crore compared to Rs. 41.7 crore in the same period in 2021-22. Consolidated sales for the third quarter were ₹772 crore as against ₹656 crore in the corresponding quarter in 2021-22.
For the Q4 FY23 outlook, Elgi on February 3rd this year said, the company is cautiously optimistic that it will achieve its goals that were set for FY 2022-23. Specific strategies for specific products and markets for 2023-24 will provide strength, even if strong headwinds occur in the future.
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