ELGIEQUIP — earnings call
The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.
Prepared remarks
Moderator · Conference Operator
MR. KAMLESH KOTAK – ASIAN MARKETS SECURITIES LIMITED
Good morning, everyone on behalf of Asian Markets, we welcome you all to the Q1 and FY25
Sir, you are not audible.
Sorry Sir, we can't hear you.
No, Sir, your voice is sounding too low.
Is it better? · Is it better now?
Is it better now?
Moderator · Conference Operator
Yeah, can you be a bit louder, Sir?
Then it will be OK.
Yeah, yeah.
Now it's better.
Perfect.
Go ahead, Sir.
Sir, we seem to have lost you again, Sir.
Yes, Sir.
Yes, I think better.
Yes, Sir.
Yes, Sir.
Please go ahead.
Sir, we are losing you in between, Sir.
Yes, Sir, you are audible now.
Could you please repeat the last statements and the one that you're making?
Sir, we are still losing you, Sir the words are dropping in between sir.
So I mean, the volume of your voice has gone down.
Yes, Sir, it's getting better.
Yeah.
Thank you so much, Sir, for your opening remarks.
We'll wait for the question queue to assemble.
Give me a couple of minutes.
Sir, the first question, we'll take it from the line of Harshit Patel.
Harshit, you may unmute yourself and go in with the question.
Is it better? · Is it better now?
Hi, Sir.
Thank you very much for the opportunity.
So, my first question is on the composition of our US business.
We sell industrial compressors manufactured in India and then we export it to US.
We also sell portables from Rotair to US.
We also assemble those medical compressors branded in the name of Pattons over there.
So, what is the share of all these activities in our overall North American revenues?
So, I'm just trying to gauge what portion of these revenues will be impacted by tariff and to what extent.
Well, so just to clarify, this Michigan Air, all these products are manufactured in India only or do we have some other kind of sourcing arrangement over there?
Understood.
So, my second question is on the profitability in both US and Europe.
I think we had achieved the break-even level in the fourth quarter of FY25 in both these geographies and correct me if I got it wrong, you mentioned that at 25% tariff levels, not the additional 25, but the initial 25, we should be able to sustain these break-even levels in the US.
Understood perfectly.
Thank you.
Thank you very much, Sir, for answering my questions.
I'll come back later.
Moderator · Conference Operator
Thank you, Harshit.
Next question, we'll take it from the line of Mayank.
Mayank, you may unmute yourself and go ahead with the question.
I think we're facing some technical difficulty from Mayank's end.
We'll take the next participant in line Rahul.
Rahul, you may unmute yourself and go ahead with your question.
Rahul?
We'll take Rahul a little later.
Next question is from the line of Bhavin Vithlani.
Bhavin, you may unmute yourself and go ahead with the question.
Is it better? · Is it better now?
Good morning, Jay.
Very well.
Thank you, Jay.
First, my compliments, really impressive performance and we saw your peer reporting yesterday.
I mean really appreciated the performance.
I have a couple of questions, so you have 18 key end user industries that you outlined in the annual presentation and out of that the critical ones that which are the larger ceilings.
If you could give us a colour where you are seeing an uptick in the inquiry level and where is it that you are actually seeing a slowdown or and I mean mid-teens growth for us is really impressive and it looks like you have clearly gained share.
So, and what's the kind of share that you have gained?
Sure.
And on the market share, it clearly looks like you've gained considerable share.
And some of the initiatives that you had in terms of stabilizer, the depth of increase in the depth of products for the oil free screw and also if you could also talk about the water well piece given that monsoons are starting.
Oil-Free screw
So last question from my side.
So, when I look at last year's performance for the US, revenues were flattish and in the commentary you mentioned there was a significant drop in the portables.
So, is the share of portables too tiny that even a sharp drop doesn't impact the overall headline numbers for the US.
OK.
Yeah.
Thank you so much.
Those are my questions.
Moderator · Conference Operator
Thank you, Bhavin.
Next question, we'll take it from the line of Mayank.
Mayank, could you please unmute yourself and go ahead with the question?
I think the problem persists sir we'll take the next person in the queue.
Vipul, can you please unmute yourself and go ahead with the question?
Vipul.
No, Sir, the lines are pretty much open.
Uh, Mayank, can you unmute yourself?
Yes, Sir, I read through it.
Sure.
Uh, we'll take the next person in queue, Sir.
Salil, can you unmute yourself and go ahead with the question?
Sure.
Thanks, Salil.
Next question, we'll take it from the line of Amit.
Amit, you may unmute yourself and go ahead with your question.
Is it better? · Is it better now?
Hi Sir, Am I audible.
Moderator · Conference Operator
Yeah.
Is it better? · Is it better now?
Yeah, thanks for taking my question.
So first question on the delay in finalization of orders which you highlighted, which many companies are highlighting amid tariff uncertainties and geopolitical situation which we saw.
So wanted to understand even if with the scenario of 25% tariff or 50% tariff, are we going to see the delays continue for the remaining 9 to 12 months?
Are we going to see the projects getting shelved off because of the higher tariff, even if it is 25%?
Some understanding there and any particular sectors where we are seeing the finalizations has been particularly delayed because of this scenario.
That is my first question.
Sure.
The second question is on the Europe and Australia market.
So, I recollect for Europe, we did also highlight that we'll be expanding into Nordic countries where the opportunities exist and also setting up expanding the distribution network there.
So, have we done any progress there and despite Europe is slow down, are we thinking of any other strategy apart from what we highlighted in our last call that you'll want to expand to Nordic countries, so any further strategic change we are doing in Europe to become better there.
Sir, I can't hear you.
Uh, I'm audible.
Moderator · Conference Operator
I yeah, yeah.
I think Mr. Jayaram has just frozen.
Give us a minute.
I think he'll reconnect.
Is it better? · Is it better now?
Yeah.
Moderator · Conference Operator
Hello.
Is it better? · Is it better now?
Yeah, yeah, you're audible Kamlesh.
Moderator · Conference Operator
Yes, Sir.
So, we can see you.
The voice is a little lower again.
Is it better? · Is it better now?
Yeah, voice is breaking up, yeah.
Yes Sir, good.
Right, Sir.
Sir, lastly on our CAPEX plan, we did talk about 250 Crore in first two years.
Just wanted to understand amid all the challenges, is this on track and secondly our guidance of $450 million this year.
Yeah.
Is this on track?
That's my last question.
Thanks.
Thank you, Sir.
Moderator · Conference Operator
Yes, yes, Sir.
Sir, we'll take those questions.
These are from participants who couldn't unmute themselves.
So, first question we'll take from Mr. Vipul Kumar.
He said, Sir, what is the progress in introducing economical range of consumers which can compete with low price Chinese products?
Sure, Sir.
The second question from Vipul is, Sir, what percentage of our motor requirement is manufactured in-house and where do we see ourselves in next three years and what impact will it have on our margins?
Sure.
Thank you, Sir.
Next question I'll take again from line of Mayank who couldn't unmute himself.
Sir, segmental gross margin in compressor has increased sharply sequentially 53% in 1QFY 26 versus 50% in 4QFY 25.
Is this associated with some kind of price hike.
Sure, Sir.
Next question.
I'll take it from line of Naysar.
Yeah, I hope I have pronounced the name right.
Could you please unmute yourself and go ahead with the question.
NAYSAR
Yeah, Hi.
Thanks for taking the question.
What I wanted to understand is Sir, you mentioned about the tariff situation that you know after maybe a 5-10% price hike, you have the 15-20% to adjust which you know, you should be able to do.
The quantum 15-20% is not less, I just wanted to understand, you know, what levers are you using to ensure that even after that 15-20%, the impact on profitability is not much.
Moderator · Conference Operator
Naysar, could you please?
I mean, could you please wait in the queue?
Yeah.
NAYSAR
I'll come back in.
Moderator · Conference Operator
Sir, in the interest of time, we'll take a couple of more questions.
One, I'll take it from the chat and one, I'll probably take it on the call.
So, the next question is from Bhavin Vithlani.
Sir, he says for the stabilizer, would ELGI have in-house manufacturing of PCBA?
We have seen multiple electric companies face quality challenges for not having control of the embedded software.
Uh, so I'll just take one last question from Rahul because we had tried to unmute him, but we couldn't unmute.
Rahul, you may please unmute yourself and go ahead with the question.
Your mic is on.
I mean, the line is on.
He has to unmute himself.
Sure Sir, with that, I think we've already exceeded our dedicated time towards it.
I would request everyone; whoever has question to please reach out to the IR team or the management directly.
Thank you once again Sir.
I would leave it to Kamlesh to end the session.
Yeah Jai, just one point.
If you can just elaborate on the progress of vacuum product business, any update you want to share?
Thank you.
Great, Sir.
Thank you.
Investors, thanks for joining in.
With that, we conclude the call.
Thank you, Jay.
Any closing remarks you want to make, Sir?
Thank you.
Thank you so much, Sir.
Questions and answers
Q1 2025-26 – INVESTOR MEET CALL