Elgi Equipments boosts capacity threefold to manufacture oxygen-plant compressors

22 May 2021

Company diverting capacities meant for other products, says MD Varadaraj

Air-compressor manufacturer Elgi Equipments has increased the capacity to manufacture compressors for specific models of oxygen generation plants.

Jairam Varadaraj, managing director of Elgi Equipments, informed the media that the company had increased its capacity almost threefold for specific models that were in demand in the oxygen sector.

“We are diverting our capacities that are there for other products to this sector now,” said Mr. Varadaraj.

“We are reaching out to customers and talking to them and taking their concurrence. So, it is a comprehensive approach,” he added. “We continue our support to our subsidiaries because we cannot compromise on deliveries in the international market because of the demand for oxygen in India.” The company expects 10%-15 % of its revenue for this quarter from the oxygen sector.

“We are not looking at oxygen as a business opportunity. We are looking at it as a social responsibility,” he said.

“We are trying to supply as much as we can at a shorter period. Compressors are a key requirement for oxygen-generating plants. This demand is expected to settle down in another three to four months,” he added.

On the overall results of the company for the last financial year, he said that the consolidated sales grew 5%. Fluctuating raw material prices had impacted profitability in the third and fourth quarters.

Capex to rise

The growth last year was because of the recovery of the economy and also because some sectors did very well. In terms of capital expenditure, last year Elgi invested ₹15 crore-₹20 crore. This year, though it had not been decided yet, it should be ₹20 crore to ₹25 crore.

The consolidated profit after tax for 2020-2021 stood at ₹102.49 crore compared with ₹42.57 crore the year-earlier period.