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

ASIAN MARKETS SECURITIES LIMITED

Good afternoon, everyone.

On behalf of Asian markets, we welcome you all to the Q1FY27 post-results webinar of ELGI Equipments Limited.

We have with us Mr. Jairam Varadaraj, Managing Director, representing the company.

I'll request Mr. Jairam to take us through the presentation and the overview of the results, following which we will start the Q&A session.

Over to you, sir.

Thank you.

Sir, we are able to see your screen, sir.

Thank you, sir, for the opening comments.

We'll just wait for the question queue to assemble.

Participants, in case you have any questions, you may please use your raise hand option.

Or you may also drop your questions into the chat box below.

So, the first question we have is from the line of Ravi Swaminathan.

Ravi, you may unmute yourself and go ahead with your question.

Ravi Swaminathan: Understood. · Management: It has been more significant.

Hi sir, good afternoon.

Congrats on a good set of numbers.

Sir, my first question is with respect to the India business, it has seen a very strong growth of almost 28%.

Any sense on, color on how much of it would have been volume driven and how much of it would have been price-led because a significant amount of raw material price increase has happened over the past few months, especially since the war.

So how much price increase we would have taken over the past few months and have we completed our price correction movement or is there further price increase that is there on the cards?

Understood, sir.

And if it is so volume driven, that is more than 20% growth in terms of volume growth has been there.

Can you highlight some of the end subsegments or sectors which have actually done really well.

Or is it that like we have got into some newer categories and some of the newer products like the aftermarket products or the stabilizer products, etc. which are contributing to this incremental growth.

Understood, sir.

And any mixed change also which has contributed to this in the sense that screw compressors have grown faster than piston, something of that sort, has it happened or is it the mix has largely been the same?

Understood.

Okay, and in terms of forward-looking inquiry numbers, etc. from certain large categories like industrials, especially metals, and then water well, infrastructure, general infrastructure, etc. how are you seeing the demand environment on the ground?

Has there been any slowdown related to the war which has been there?

Within India demand, or are you seeing

Understood, sir.

Thanks a lot.

I'll come back in the queue if I have more questions.

Moderator · Conference Operator

Thank you, Ravi.

The next question we have from the line of Manjeet Rathore.

Manjeet, you may unmute yourself and go ahead with your question.

Manjeet Rathod

Hello, Mr. Varadaraj, very good to see you.

Moderator · Conference Operator

Thank you, Manjeet.

Sir, next question, we'll take it from the line of the Yash.

Yash, you may unmute yourself and go ahead with your question.

Ravi Swaminathan: Understood. · Management: It has been more significant.

Okay, got it, sir.

And the second question is with respect to after sales service.

After sales would have seen similar kind of growth that the product sales would have seen.

And what kind of contribution does after sales have in our overall revenue mix, both at the India level and at the global level?

Okay, and the global benchmark for after sales service as a percentage of revenue, it used to be around mid-30s.

Is that a right understanding?

We are we would try to.

Sir, you are on mute.

Moderator · Conference Operator

Sir, you've gone on mute, sir.

Ravi Swaminathan: Understood. · Management: It has been more significant.

Understood, sir, and with respect to you had mentioned about EV application in the comment initial comments, so if you can elaborate more as to where do the compressors go into EV applications.

You had in the initial comments you had mentioned that we have done well in electric vehicle EV applications also.

If you can talk about where the compressors go into EV applications.

Understood.

OK.

So it's kind of an extension to the auto products that we end up.

Okay.

Okay, oh, so that is leading to.

Understood, sir, very clear.

Final questions, if you can give a mix of sales mix between industrial, infra, and retail sales, and also between piston and screw, that will be great.

Sir, retail means automotive, garages, etc. would work and all these things I think one can classify it into retail.

Sure, sir.

Thanks a lot.

Moderator · Conference Operator

Thank you, Ravi.

Sir, the next question we take is from the line of Mr. Vipul Kumar.

Vipul, you may unmute yourself and go ahead with your question.

Vipulkumar Shah

Hi, congratulations, sir, for a very good set of numbers.

So, my question is, what is our, in reply to earlier question, you said you have one of the lowest warranty costs.

So, is it possible to quantify what is our warranty cost as a percentage of sales, and how does it compare with our years?

Moderator · Conference Operator

Thank you, Vipul.

Sir, the next question we'll take is from the line of Mr. Ankur.

Ankur, you may unmute yourself and go ahead with your question.

Ankur Periwal

Yeah, hi, sir.

Thanks for the opportunity.

First question on the distribution side, both in India as well as, you know, in the global markets.

You did mention that Demand=Match has been launched across India.

Will it be fair to say that more or less the entire nation is covered with this now? or there are still some.

Moderator · Conference Operator

Thank you, Ankur.

The next question, sir, we'll take is from the line of Sri Agarwal.

Sri, you may unmute yourself and go ahead with your question.

Sri Agarwal

Thank you, Mr. Varadaraj.

Congrats on Good Numbers.

Just one for me, which is on the improvement in the margins for the international subsidiaries.

Just, you know, you mentioned that aftermarket as a share of overall improving is one of the contributors.

But other than that, what have been the drivers of this?

Because at a time when, you know, commodity costs are high, this is quite notable.

And also the sustainability of this improvement, should we expect this to continue in the coming quarters as well.

Thank you.

Moderator · Conference Operator

Yeah.

Sir, before we move to the next person, I'll take one question from the chat.

It says, do, sir, do we supply compressors to CNG filling stations?

So, the next question is from the line of Mr. Dhaval Shah.

Dhaval, you may unmute yourself and go ahead with your question.

Dhaval Shah

Yeah, hi, sir.

Congratulations on great set of numbers.

Moderator · Conference Operator

Thank you, Dhaval.

Sir, there is a follow-up question from Mr. Vipul Shah.

Vipul, you may unmute yourself and go ahead with your question.

Vipulkumar Shah

Yeah, thanks for the opportunity.

Sir, Demand=Match is optional, or is it mandatory for all new dispatches, sir?

Moderator · Conference Operator

I mean, sir, there is one follow-up question from Ravi Swaminathan.

Ravi, you may unmute yourself and go ahead with your question.

Ravi, please unmute yourself and go ahead with your question.

Ravi Swaminathan: Understood. · Management: It has been more significant.

Yeah, hi, sir.

One final follow up question.

With respect to some of the new age sectors like EV and renewables and probably even data center, what would be the revenue contribution to India and global revenue for you from these segments?

Any broad sense on them?

I'm just trying to figure out whether are they meaningful numbers for revenue or not.

Okay, understood, sir.

And in terms of metals like steel, copper, aluminum, etc. are you seeing big traction inquiries, etc. picking up very significantly?

Because usually they change the entire growth rate itself because of big orders coming in.

Understood, and here centrifugal compressors only go into it largely, or is it like the addressable screws?

Understood, sir.

Thanks A lot.

Moderator · Conference Operator

Thank you, Ravi.

The next question we have is from the line of Manjeet.

Manjeet, you may unmute yourself and go ahead with your question.

Manjeet Rathod

Hello again, sir.

I'm not seeking a very specific answer.

I just wanted to pick your mind.

Will you please feel free to answer it in whichever way you feel like.

When we look at Atlas Copco, when we look at Ingersoll Rand, their technological capabilities and our technological capability, where do you see the gap lies, if there is any?

Moderator · Conference Operator

Sir, then the next question is line from is from the line of Mr. Ritwik.

Ritwik, you may unmute yourself and go ahead with your question.

Ritwik Sheth

Yeah, hi, good afternoon, sir.

So, my question is on our cost, employee cost and operating cost.

In the last three to five years, we have seen it grown in mid to high teens.

So, you mentioned that we are looking to rationalize the cost at Europe and try to become more cost efficient.

So, do you think that this trajectory should be somewhat rationalized from current levels or should this trajectory continue over the next three years as well?

Moderator · Conference Operator

Thank you, Ritwik.

Sir, I see no more questions, so I'll hand over the mic to Kamlesh Ji for the vote of thanks and probably the closing remarks followed by your closing remarks.

Yeah, so just one point, can you just help us understand the Italian joint venture progress when are we seeing the product to be launched?

The new product that we are launching now.

In collaboration, vacuum products.

Great, sir.

Great.

So, yeah, thank you, sir, for all the insights.

Any closing remarks you want to make?

Thank you.

Thank you everyone.

With that, you can go log off the call.

Have a good day.

Thank you.

Questions and answers

14:42:06 +05'30' · Research Analyst

Q1 2026-27 – INVESTOR MEET

Good afternoon, sir.

Thank you for the opportunity.

I have a very broad question, sir.

What is our right to win in the global markets?

As you always say, we don't compete on price, nor the industry works that way.

So, what makes us different that a customer who has been using Ingersol Rand, Atlas Copco, or any other competitor for that reason to switch towards us or when they expand their capacity chooses us over anyone else.

Thank you, sir, for the answer.

But, sir, how are we working on getting in front of the customer, like on that side?

Thank you, sir.

Moderator · Conference Operator

Thank you.

Sir, we'll take the next question from the line of Mr. Ravi Swaminathan.

Ravi, you may unmute yourself and go ahead with your question.

Ravi Swaminathan: Understood. · Management: It has been more significant.

Hi, sir.

A few more follow-up questions which I have.

Given the kind of strong growth that we have seen during this quarter, is it safe to assume that we would have gained market share in the Indian market?