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Quick Pointers:

*    Manufacturing output scaled up by 1.5x supported by the commissioning of the Sanand facility

*    Witnessed strong order booking across power, renewables, semiconductors & electronics, steel and other key sectors

We revise our FY27E/FY28E EPS estimates by +7.2%/+7.6% and upgrade our rating from ‘Accumulate’ to ‘Buy’ factoring in stronger execution aided by new facility ramp-up, robust order demand and adoption of new products. Ingersoll-Rand India (INGR) reported a strong quarter, with revenue growth of 19.4% YoY while EBITDA margin contracted by 175bps YoY to 25.1% (against higher base). The commissioning of the Sanand facility has enabled a ~1.5x scale-up in manufacturing output, supported by robust order demand from power, renewables, semiconductors and other key industrial sectors. Order intake remains strong, driven by rising adoption of energy-efficient and contamination-free compressed air solutions, customized offerings for complex applications and strong customer relationships, while the service portfolio continues to gain traction on a growing installed base. Strategically, INGR is prioritizing oil-free low-pressure solutions, scaling contact-cooled rotary technologies for Tier-2 markets, accelerating OEM and rental growth, expanding diversified oil-free platforms and driving AGS localization, with >90% localization of rotary screw compressors targeted over the next year—supporting competitiveness and medium-term margin resilience. The stock is currently trading at a PE of 35.0x/30.1x on FY27/28E. We upgrade our rating from ‘Accumulate’ to ‘BUY’ with a revised TP of Rs4,589 (Rs4,271 earlier) valuing the stock at a PE of 42x Sep’27E (same as earlier). Upgrade to ‘BUY’.

Long term view: IR India is well-positioned to capitalize on the growing demand for compressors in India given it is 1) among the top 3 air compressor players in India, 2) expanding its air compressor manufacturing capacity by 50% which will drive volumes & scale, and 3) backed by strong global parentage of Ingersoll Rand Inc (IR Inc.), providing access to cutting-edge R&D and technology.

Stronger execution drives the revenue growth: Revenue increased by 19.4% YoY to Rs4.6bn (Ple: Rs4.0bn) driven by strong execution across the compressed air portfolio. Gross margin contracted by 344bps YoY to 40.7% (Ple: 43.5%) against higher base in Q3FY25.EBITDA increased by 11.6% YoY to Rs1.1bn (Ple: Rs1.0bn) while EBITDA margin contracted by 175bps YoY to 25.1% (Ple: 25.2%), against higher base in Q3FY25, due to lower gross margin. PBT (exc. Extra-ordinaries) increased by 14.8% YoY to Rs1.2mn (Ple: Rs1.0bn) aided by increase in other income by 44.1% YoY to Rs115mn. Adj.PAT increased by 18.4% YoY to R920mn (Ple: Rs752mn) due to better operating performance.

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