Elgi Equipments: A Key Player In Compressor & Pump Industry

“The Q4 we expected to be as strong as the Q3. We normally have very strong Q4 like most companies in India. We are not sure considering the way that is all these uncertainties and changes that are there whether we will have that kind of a hockey stick in Q4 but we still believe it will be as good as the Q3. As far as profitability is concerned we expect that we will continue to maintain it. We do not see continuing improvement in the same trajectory, but we will be able to maintain the current levels of profit. As far as capex is concerned we had projected that our total spend will be about Rs.50 Crores and we are still well within that.”
– Jairam Varadaraj, Managing Director

Stock Data

Ticker	ELGIEQUIP
Exchange	NSE & BSE
Industry	Compressor & Pump

Share Price

Last 1 Month	-1.9%
Last 6 Months	+10.4%
Last 12 Months	+45.4%

Business Basics

Elgi Equipments Limited is a leading manufacturer of air compressors and automotive equipment based in Coimbatore, India. The company was founded in 1960 by L.G. Varadaraj and has since grown into a global player in the industry. Elgi Equipments has a presence in over 120 countries and is known for its innovative products and services. The company’s product portfolio includes a range of air compressors, vacuum pumps, and other industrial equipment. The companies success in the industry is driven by its commitment to innovation and technology. The company has a strong focus on research and development and has been awarded several patents for its products and technologies. In addition to its core business, it has also expanded into the automotive equipment industry.

The company offers a range of products such as wheel service equipment, vehicle washing systems, and nitrogen generators for tire inflation. These products are used by automotive service centers and dealerships. The company’s customer-centric approach and strong focus on innovation have helped it to establish a reputation as a trusted partner for its clients. The company has won several awards and accolades for its products and services, including the Deming Prize for Quality in 2008. With a growing demand for air compressors and other industrial equipment, Elgi Equipments is well-positioned to continue its success in the future. The company’s global presence, innovative products, and commitment to customer satisfaction make it a leader in the industry.

Q3 FY23 Financial Performance

Elgi Equipments Limited reported Revenue from Operations for Q3 FY23 of ₹772.44 Crore up from ₹655.61 Crore year on year, a growth of 17.8%. The Revenue was driven by its Air Compressor segment which surged by 18.9% up to ₹710.84 Crore. Consolidated Net Profit of ₹80.06 Crore, up 92% from ₹41.73 Crore in the same quarter of the previous year. The Earnings per Share is ₹2.53 for this quarter.

Company’s Business Segments

Elgi Equipments has two major segments in its business, which are the air compressor and automotive equipment segments. The air compressor segment is the core business of the company, and Elgi offers a wide range of air compressors suitable for different industries such as automotive, textiles, food processing, and construction. The company’s air compressors are known for their energy efficiency, reliability, and durability. Elgi’s patented “Eta-V” technology provides significant energy savings and improved efficiency, making its air compressors one of the most sought-after products in the market. The company’s range of air compressors includes rotary screw, reciprocating, and centrifugal compressors that cater to a diverse set of applications.

Elgi’s automotive equipment segment offers a variety of products such as wheel service equipment, vehicle washing systems, and nitrogen generators for tire inflation. These products are used by automotive service centers and dealerships. Elgi’s automotive equipment is known for its quality, reliability, and innovative technology. The company’s products are designed to improve the efficiency of automotive service centers and provide customers with a superior experience. Elgi’s range of automotive equipment includes tire changers, wheel balancers, alignment machines, and nitrogen generators.

Elgi Equipment’s Revenues From Different Geographies

The company’s revenue mix has remained at 45% from India and 55% from the rest of the world. Elgi has a contract-based railway business in India where it receives orders, participates in tenders, and the orders are typically ones that take a year to complete. Compared to last year, the Australian market performed better. There were, however, some difficulties with certain products and business sectors. Revenue from Europe is still increasing and is consistent with the company’s overall European strategic plan. As per the management, “We are waiting for the coming year when we expect to see a significant shift in the volume which will start changing the bottomline profile of Europe.”

Pump & Compressor Industry In India

The revenue-based pump market in India is anticipated to expand at a CAGR of more than 7% between 2021 and 2026. While the compressor market, which had a size of $1,943.4 million in 2019, is projected to grow at a CAGR of 6.2% from 2020 to 2030. Due to the increased use of pumps across a variety of end-user sectors, the demand for pumps is anticipated to rise steadily. India’s pump manufacturers have confined their attention to the construction and agricultural industries. Additionally, it is anticipated that India’s expanding automotive industry will fuel the demand for compressors.