Air compressor maker Elgi Equipments seeks $450 mn revenue by FY26

23 November 2023

Air compressor manufacturer Elgi Equipments expects revenue to grow 24 per cent from $364 million the last Financial Year to $450 million by FY 2025-26, said a top company executive.

“I think it’s a reasonable number considering our current run rate. We are purely focusing on our core business as the market opportunities are huge and we have been in this market for the last 10 years,” said Jairam Varadaraj, managing director of Elgi. The company does not expect any major business challenges due to the global geopolitical situation.

“There have been some challenges in certain pockets of the world with the Ukraine war, inflation, and rise in energy prices, but these are merely speed bumps and potholes that you encounter when you've had a good run for a few years,” said Varadaraj.

“In spite of the above challenges, the US market is continuing to hold because of the large investments being made and infrastructure development is trickling down. Our Indian market is also doing well, and we remain optimistic about the future of India. Southeast Asia and Australia are currently down. Although the share of revenue from these markets is minimal, both remain key markets for us. Overall, we do not anticipate any concerns in the next few quarters,” he added.

ELGi said its direct-to-market initiatives in West Asia had delivered strong results. North America, where the company has been for 10 years, exceeded its sales forecast and significantly improved its profitability in FY23.

Varadaraj expected demand to pick up across sectors. “You know the advantage of the compressor business is that compressed air is a utility and therefore almost every manufacturing unit requires some level of compressed air in their system, just like electricity. Almost all industries we cater to have been quite robust,” he said.

“There are some that have been facing challenges because of the nature of industry. For example, textiles. There has been a huge reduction in demand in Europe and the US which had an impact in India as well. The situation has been slowly improving and we are hopeful that demand will pick up soon.”