Elgi Equipments Reports 8% Revenue Growth in Q1, Navigates US Tariff Challenges
Elgi Equipments, a leading air compressor manufacturer, reported 8% year-over-year revenue growth in Q1. EBITDA reached 1200.00 million rupees, below expectations. PBT increased by 18%. The company maintained strong performance in India and Middle East & Africa, while facing challenges in Europe and Australia. Strategic initiatives include launching new stabilizer technology and increasing in-house motor production. The company is addressing potential 50% tariffs on US imports and expects a 5-10% price increase in the US market. Despite challenges, Elgi remains on track for its $450.00 million revenue guidance and plans 250.00 crore CAPEX over two years.

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Elgi Equipments , a leading air compressor manufacturer, has reported an 8% year-over-year revenue growth in the first quarter, demonstrating resilience amid global economic challenges. The company's performance was driven by volume growth, favorable exchange rates, and strategic price increases.
Financial Highlights
- Revenue grew by 8% year-over-year
- EBITDA reached 1200.00 million rupees, falling short of the expected 1500.00 million rupees
- Profit Before Tax (PBT) increased by 18% year-over-year
- The company maintained a healthy net cash position
Geographic Performance
- India: Continued strong performance despite some market hesitation
- United States: Remained profitable despite tariff concerns
- Europe: Faced challenges due to economic conditions
- Middle East & Africa: Showed strong revenue and profitability
- Australia: Experienced weakness but showing signs of recovery
Strategic Initiatives and Challenges
Jairam Varadaraj, Managing Director of Elgi Equipments, highlighted several key points during the earnings call:
New Technology Launch: The company is set to introduce new stabilizer technology across India in September, with plans for global expansion by April next year.
In-house Motor Manufacturing: Elgi aims to increase its in-house motor production from the current 40-45% to 70-75% by the end of this financial year, with a target of reaching 90% in two years.
US Tariff Impact: The company is actively working on solutions to address the potential 50% tariff on imports to the US. Varadaraj stated, "We have a solution in place for the first 25%, but the next 25% will involve certain structural changes in the way we are organized."
Market Adaptation: Elgi expects a 5-10% price increase in the US market to offset tariffs and is confident in its ability to remain competitive.
Portable Compressor Segment: The company anticipates recovery in the portable compressor market within 6-8 months.
Outlook
Despite the challenges, Elgi Equipments remains on track to achieve its $450.00 million revenue guidance. The company continues to invest in long-term growth initiatives, including its planned 250.00 crore CAPEX over two years.
Varadaraj expressed cautious optimism about the future, stating, "Ex tariffs, I think everything is positive. But you know, it's very difficult to say, you know, we'll ignore the tariff, right? And it's a large market. It's a large economy."
As Elgi Equipments navigates the complex global economic landscape, its focus on technological innovation, market expansion, and operational efficiency positions it to capitalize on emerging opportunities while addressing potential headwinds.
Historical Stock Returns for Elgi Equipments
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
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-0.23% | +2.49% | -8.59% | +6.04% | -20.21% | +346.86% |