Consolidated revenue growth of 25% YoY, revival of international subsidiaries, margin expansion of 300 bps YoY and positive management commentary (15%+ growth) were the hallmark of Q3FY18 results.

Top line to growth to continue: We assess the Q3FY18 as positive. YTD EPS grew by 28% owing to both revenue growth of 11% and EBITDA margin expansion of 107 bps. We expect the EBITDA margin to further expand and reach 16% levels due to easing material costs aided by an anticipated 25% growth in international business in near future.

Q2 consolidated revenue grew 15% YoY at Rs 3.7 bn with domestic business growing ~10% YoY and key subsidiaries growing 23% YoY. Higher input cost partially offset benefits from operating efficiencies, with EBITDA margin up ~150 bps YoY at 12%.

Consolidated revenue in Q1FY18 grew 5% YoY (after 2 quarters of de-growth) to Rs 3.7 bn, in line with our estimate. This was led by domestic revenue (Rs 2.3 bn; up 7% YoY) and cessation of revenue decline in the international operations.

Mediocre results; but on a growth path: Elgi has recorded a mediocreperformance for Q1FY18 performance with revenue de-growth of 5.0% sequentially, however, has grown at 4.6% compared to Q1FY17. The numbers were hit to the extent of muted demand from key customers both domestically &internationally, exclusion of Belairs numbers and sluggish performance in China atthe consolidated level.

Solar Pumps Sales Boost Q1FY18 Revenue:Shaktis Q1FY18 revenue has grown by 18.6% YoY. The massive growth was supported by solar pumps sales of Rs.510mn which were just Rs.250mn last year.Shakti claims a market share of around 70%-80% in the solar pumps industry.

KSB Revenues Flat; Large Orders Under Execution: Revenue (net) for KSB grew YoY by meagre 0.6% to Rs.4157mn in H1CY17 while the same for Q2CY17 grew by 3.6% to Rs.2,102mn. In terms of segmental performance, Pumps segment revenue reached to Rs.3725mn while for the Valves segment grew by 1.7% to Rs.681mn inH1CY17 while revenues for Pumps and Valves grew by 3.1% and 3.8% to Rs.1,890mn and Rs.343mn respectively in Q2CY17.

Mediocre results, however on a growth path: Elgi's Q4FY17 performance was impressive on QoQ basis, however, has not grown compared to Q4FY16. The numbers were hit to the extent of muted demand from key customers bothdomestically & internationally, exclusion of Belair's numbers and sluggish performance in China at the consolidated level.

Consolidated and standalone revenue degrew 8% and 5%. Domestic revenue growth was impacted by lumpy revenue (from water-well segment) in the base quarter. This was flagged by the management in Q3.

KSB Delivers Below Par Performance; Profitability Under Stress: Revenue (net) for KSB Pumps dropped marginally to the tune of 2.2% on YoY basis during Q1CY17 to Rs.2,054mn. In terms ofsegmental revenue, on YoY basis, Pumps revenue de-grew by 3.0% to Rs.1,834mn while Valves revenue dropped marginally by0.4% when compared to Q1CY16 and reached to Rs.337mn.